What are Incoterms?
INCOTERMS are a set of three-letter standard trade terms most commonly used in international contracts for the sale of goods. It is essential that you are aware of your terms of trade prior to shipment.
EXW (EX Works)
Seller is only responsible for making goods available at seller’s premises. The buyer bears the full risk from there to the destination.
FCA (Free Carrier)
Seller is responsible for delivery to the custody of the carrier, which is provided by the buyer. Risk is transferred as soon as loading has taken place.
CPT (Carriage Paid To)
Seller delivers the goods to the carrier at an agreed place of delivery and pays for transport to the named destination. Risk is transferred at the place of delivery, whereas seller pays for transport to the destination.
CIP (Carriage & Insurance Paid)
Seller delivers the goods to the carrier at an agreed place of delivery and pays for transport and insurance to the named destination. Risk is transferred at the place of delivery, whereas seller pays for transport and insurance to the destination.
DAT (Delivered at Terminal)
Seller delivers the goods unloaded at a specified place inside the agreed terminal. Risk is transferred as soon as the goods have been unloaded.
DAP (Delivered at Place)
Seller delivers the goods to the disposal of the buyer on the arriving means of transport at the agreed place. Seller assumes the risk until the goods are made ready for unloading from the arriving means of transport.
DDP (Delivered Duty Paid)
Seller is responsible for bringing the goods to the destination, paying any duty and making the goods available to the buyer. Risk is transferred as soon as the buyer has access to the goods ready for unloading at the agreed destination.
FAS (Free Alongside Ship)
Seller is responsible for delivery of the goods at the port alongside the ship. From this point onwards, risk lies with the buyer.
FOB (Free on Board)
Seller is responsible for delivery of the goods loaded on board the ship. Risk is transferred as soon as the goods have been set down inside the ship.
CFR (Cost & Freight)
Seller covers the cost of freight, duty unpaid, to the names port of destination. Risk is transferred as soon as the goods have been set down inside the ship.
CIF (Cost Insurance & Freight)
Seller covers the cost of insurance and freight, duty unpaid, to the named port of destination. Risk is transferred as soon as the goods have been set down inside the ship.