Incoterms

The International Commercial Terms or 'Incoterms' are the defined set of commercial terms published by the International Chamber of Commerce (ICC). Incoterms are widely used in international transactions; intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.

The Incoterms rules are globally accepted by governments, legal authorities, and practitioners for the interpretation of most commonly used terms.

Cost and Freight (CFR)

An Incoterm which may be used in respect of transport by sea or inland waterway. The seller delivers the goods on board the vessel or procures the goods already so delivered. The seller contracts (or procures a contract) for and pays the costs and freight to bring the goods to the named port of destination. The seller clears the goods for export.

Cost Insurance and Freight (CIF)

An Incoterm which may be used in respect of transport by sea or inland waterway. The seller delivers the goods on board the vessel or procures the goods already so delivered. The seller contracts (or procures a contract) for and pays the costs and freight necessary to bring the goods to the named port of destination and obtains insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller clears the goods for export.

Carriage Paid To (CPT)

An Incoterm which may be used irrespective of the mode of transport used. The seller delivers the goods, cleared for export, to the nominated carrier . The seller must contract (or procure a contract) for and pay the cost of carriage to bring the goods to the named destination.

CIP Carriage And Insurance Paid To

CIP – Carriage and Insurance Paid (To) (named place of destination)
The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.

Delivered Duty Paid (DDP)

An Incoterm which may be used irrespective of the mode of transport used. The seller delivers when the goods are placed at the buyer's disposal cleared for import ready for unloading from the arriving means of transport at the named place of destination. The seller has to bear all the costs and risks involved in bringing the goods thereto including any duty for import.

Delivered At Place (DAP)

An Incoterm which may be used irrespective of the mode of transport used. The seller delivers when the goods are placed at the buyer's disposal on the arriving means of transport, ready for unloading at the named place of destination. The seller clears the goods for export.

Delivered At Terminal (DAT)

An Incoterm which may be used irrespective of the mode of transport used. The seller delivers when the goods are placed at the buyer's disposal, unloaded from the arriving means of transport, at a named terminal at the named port or place of destination. The seller clears the goods for export.

Ex Works (EXW)

The seller makes the goods available at his/her premises. EXW means that a buyer incurs the risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and does not clear them for export. If the seller does load the goods, he does so at buyer's risk and cost. The buyer arranges the pickup of the freight from the supplier's designated ship site, owns the in-transit freight, and is responsible for clearing the goods through Customs. The buyer is also responsible for completing all the export documentation.

Free Alongside Ship (FAS)

An Incoterm which may be used in respect of transport by sea or inland waterway. The seller delivers when the goods, cleared for export, are placed alongside the vessel at the named port of shipment.

Free Carrier (FCA)

An Incoterm which may be used irrespective of the mode of transport used. The seller delivers the goods, cleared for export, to the Carrier nominated by the buyer at the named place. The seller is responsible for loading only if delivery occurs at the seller's premises.

Free on Board (FOB)

An Incoterm which may be used in respect of transport by sea or inland waterway. The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The seller clears the goods for export. See also Simple Free on Board.

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