INCOTERMS 2010
EXW – Ex Works (named place)
The seller makes the goods available at his premises. The buyer is responsible for
all charges. This trade term places the greatest responsibility on the buyer and
minimum obligations on theseller. The Ex Works term is often used when making an
initial quotation for the sale of goodswithout any costs included. EXW means that
a seller has the goods ready for collection at his premises (Works, factory,warehouse,
plant) on the date agreed upon.The buyer pays all transportation costs and also
bearsthe risks for bringing the goods to their final destination.
FCA – Free Carrier (named places)
The seller hands over the goods, cleared for export, into the custody of the first
carrier(named by the buyer) at the named place. This term is suitable for all modes
of transport,including carriage by air, rail, road, and containerised / multi-modal
sea transport.This is the correct "freight collect" term to use for sea shipments
in containers, whetherLCL (less than container load) or FCL (full container load).
FAS – Free Alongside Ship (named loading port)
The seller must place the goods alongside the ship at the named port. The seller
must clearthe goods for export. Suitable only for maritime transport but NOT for
multimodal sea transportin containers (see Incoterms 2010, ICC publication 715).
This term is typically used forheavy-lift or bulk cargo.
FOB – Free on board (named loading port)
The seller must themself load the goods on board the ship nominated by the buyer,
cost and riskbeing divided at ship's rail. The seller must clear the goods for export.
Maritime transportonly but NOT for multimodal sea transport in containers (see Incoterms
2010, ICC publication 715).The buyer must instruct the seller the details of the
vessel and port where the goods are to beloaded, and there is no reference to, or
provision for, the use of a carrier or forwarder.It does not include Air transport.
This term has been greatly misused over the last three decadesever since Incoterms
1980 explained that FCA should be used for container shipments
CFR or CNF – Cost and Freight (named destination port)
Seller must pay the costs and freight to bring the goods to the port of destination.
However,risk is transferred to the buyer once the goods have crossed the ship's
rail. Maritime transportonly and Insurance for the goods is NOT included. Insurance
is at the Cost of the Buyer.
CIF – Cost, Insurance and Freight (named destination port)
Exactly the same as CFR except that the seller must in addition procure and pay
for insurance forthe buyer. Maritime transport only.
CPT – Carriage Paid To (named place of destination)The general/containerised/multimodal
equivalent of CFR. The seller pays for carriage to the namedpoint of destination,
but risk passes when the goods are handed over to the first carrier.CIP – Carriage
and Insurance Paid (To) (named place of destination)The containerised transport/multimodal
equivalent of CIF. Seller pays for carriage and insuranceto the named destination
point, but risk passes when the goods are handed over to the first carrier
DAT – Delivered At TerminalThis term can be used when the goods are transported
by rail and road. The seller pays for transportation to the named place of delivery
terminal. The buyer arranges for customs clearanceand pays for transportation from
the terminal to buyer factoryDAP - Delivered At Place (named destination place)This
term means that the seller delivers when the goods are placed at the disposal of
the buyer onthe arriving means of transport ready for unloading at the named place
of destination. This isexactly what the old Incoterm DDU stipulated.
DDP – Delivered Duty Paid (named destination place)This term means that the seller
pays for all transportation costs and bears all risk until the goodshave been delivered
and pays the duty. Also used interchangeably with the term "Free Domicile".The most
comprehensive term for the buyer. In most of the importing countries, taxes such
as(but not limited to) VAT and excises should not be considered prepaid being handled
as a "refundable"tax. Therefore VAT and excises usually are not representing a direct
cost for the importer since theywill be recovered against the sales on the local
(domestic) market.
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