Incoterms
GRUPO | INCOTERMS 2010 | POINT OF TRANSFER OF CHARGE | POINT OF TRANSFER OF RISK |
---|---|---|---|
E | EXW - EX-WORK | ORIGIN | WAREHOUSE IN ORIGIN |
F | FAS - FREE ALONG SIDE SHIP | MAIN CARRIAGE NOT PAID | ALONGSIDE THE SHIP |
F | FOB - FREE ON BOARD | MAIN CARRIAGE NOT PAID | FIRST WALLED VESSEL |
F | FCA - FREE CARRIER | MAIN CARRIAGE NOT PAID | FIRST INTERNATIONAL TRANSPORT |
C | CFR - COST AND FREIGHT | CARRIAGE | FIRST WALLED VESSEL |
C | CIF - COST, INSURANCE AND FREIGHT | CARRIAGE | FIRST WALLED VESSEL |
C | CPT - COST, INSURANCE AND FREIGHT | CARRIAGE | FIRST INTERNATIONAL TRANSPORT |
C | CIP - COST, INSURANCE AND FREIGHT PAID | CARRIAGE | FIRST INTERNATIONAL TRANSPORT |
D | DAP - DELIVERY AT PLACE | EXPENSES UNTIL LOCAL DELIVERY | DETERMINED LOCAL DESTINATION |
D | DAT - DELIVERY AT TERMINAL | STORAGE COSTS UNTIL END | DETERMINED LOCAL DESTINATION |
D | DDP - DELIVERY DUTY PAID | COSTS INCLUDING LOCAL TAXES UNTIL FINAL DELIVERY | DETERMINED LOCAL DESTINATION |
EXW – Ex Works (Named Place)
The goods are placed at the disposal of the buyer at the seller’s premises, or at another named place (factory, warehouse, etc.), without being ready for export or loaded on any transport vehicle.
In this term, the exporter terminates your participation in business when packing the goods on transport packaging (box, bag, etc.) and offers, within the time limit set in your own establishment.
So, it is up to the foreign importer to adopt all the arrangements for withdrawal of the goods from the exporting establishment, internal transport, shipment abroad, licensing, freight contracts and international insurance, etc.
The term “EXW” should not be used when the seller is not able to, directly or indirectly, obtain the necessary documents for export of the goods.
As you can see, the buyer assumes all costs and risks involved in the transport of the goods from the place of origin to the destination.
FCA – Free Carrier (Named Place)
(Incoterms) Abbreviation for free carrier (named place). The Incoterm (delivery term) under which the seller is responsible for handing over the goods, cleared for export, to a transportation carrier named by the buyer at a named location, typically at either the seller’s facility or else the terminal of the buyer-nominated carrier or freight forwarder, typically within the country of export. If the FCA point is the seller’s facility, and loading the conveyance is essential to “handing over the goods,” the seller is responsible for the risk and expense of loading (if loading is not otherwise included in the carrier’s basic transportation charge). FCA, shipper’s facility, is the appropriate delivery term for situations in which the shipper will load an intermodal container, truck trailer, rail car, barge or other conveyance.
The seller is not responsible for the cost of unloading the conveyance at the named destination point, nor for transfer of the goods to the on-carrier. For example, if the FCA point is an ocean carrier and/or inland waterway terminal (other than the seller’s own facility), the buyer is responsible for unloading the incoming FCA conveyance, inclusive of forklift charge or other expenses, and for loading the outgoing vessel (e.g., the terminal charges, or wharfage and handling charge, etc.). Under FCA terms, the seller has no obligation to insure the shipment.
FAS – Free Alongside Ship (Named Porto f Shipment)
The Incoterm (delivery term) under which the seller is responsible for arranging transportation of the goods to a named ocean or inland waterway port and placing them “alongside” the vessel which the buyer has arranged to transport the goods. The seller is also responsible for export. For this reason, FAS terms require special coordination by the shipper or freight forwarder with the inland carrier and water carrier. Under FAS terms, the seller has no obligation to insure the shipment.
This term is used for shipment via ocean and inland water transportation only and is different from FOB in that the seller is not responsible for placing the goods on the vessel.
FOB – Free on Board (Named port of shipment)
The Incoterm (trade term) under which the seller is responsible for arranging transportation of goods to a vessel named by the buyer at a named port, and for all costs of placing the goods on board the vessel if this not included in the ocean carrier’s basic transportation rate. The seller’s responsibility is satisfied when the cargo is “on-board” the vessel. The seller is not responsible for costs of actually stowing the goods on board, but is responsible for that portion of the terminal charges which cover services other than stowage and vessel wharfage charges. The seller is not responsible for the cost of ocean carriage, marine cargo insurance, nor for arranging the contract of carriage unless the buyer requests his assistance with this. This Incoterm may never be used alone; rather it must be clarified by stating a specific location, an, because of possible uncertainty as to mode the type of conveyance (e.g., “FOB vessel, Baltimore”).
CFR – Cost and Freight (Named port of destination)
The Incoterm (delivery term) under which the seller is responsible for arranging and paying for transportation of the goods (but not shipping insurance) through to a named ocean/inland waterway destination port, typically in the destination country. Note, however, that the seller has fulfilled his obligation when he has tendered the goods to the transportation carrier who, under the contract of carriage, will accomplish this transportation to the named point. When the cargo is “on-board” the vessel, typically in the origin country, the risk of loss of the goods and/or unforeseeable costs transfers to the buyer. This Incoterm may be used only with ocean or inland waterway transportation for cargo delivered directly to the vessel (i.e., cargo shipped loose or in bulk, aboard a breakbulk vessel, ro-ro vessel, bulk vessel, etc.); it is not used for cargo to be shipped in an intermodal container via a container vessel, where the correct term for delivery to a foreign port or inland container yard is CPT.
CIF – Cost, Insurance and Freight (Named port of destination)
The Incoterm (trade terms) under which the seller is responsible for arranging and paying for transportation of the goods and shipping insurance through to a named ocean or inland waterway destination port. Note, however, that the seller has fulfilled his obligation when he has tendered the goods to the transportation carrier who, under the contract of carriage, will accomplish this transportation to the named point. Once the cargo is “on-board” the vessel, typically in the origin country, the risk of loss of the goods and/or unforeseeable costs transfers to the buyer.
Note that under Incoterms, CIF is used only for ocean or inland waterway shipment, and then only for cargo shipped loose or in bulk (e.g., via a breakbulk vessel, ro-ro vessel or bulk vessel), and not for cargo shipped in an intermodal container via a container vessel, where the CIP term is used for this other mode shipments where the seller is responsible for insuring and paying freight through to a named destination point/airport.
CPT – Carriage Paid to (Named place of destination)
The Incoterm (delivery term) under which the seller is responsible for arranging transportation and paying the freight for goods to a named point, typically in the destination country. Note, however, that the seller has fulfilled his obligation when he has tendered the goods to the transportation carrier who, under the contract of carriage, will accomplish this transportation to the named point. At this point, typically in the origin country, the buyer assumes the risk of loss of the goods and/or unforeseeable costs. This Incoterm may be used with any transportation mode, including through multimodal movements. Under CPT terms, the seller has no obligation to insure the shipment.
CIP – Carriage and Insurance Paid to (Named place of destination)
The Incoterm (delivery term) under which the seller is responsible for arranging and paying for both the transportation of the goods and shipping insurance through to a named destination point, typically in the destination country. Note, however, that the seller has fulfilled his obligation when he has properly insured the goods and tendered them to the transportation carrier who, under the contract of carriage, will accomplish this transportation to the named point. At this point, typically in the origin country, the risk of loss of the goods and/or unforeseeable costs transfers to the buyer.
This Incoterm may be used with any transportation mode, including cargo to be shipped in intermodal containers aboard a container vessel, and through multimodal movements. (For cargo shipped loose or in bulk via vessel, CIF would typically be used instead of CIP for port-to-port ocean or inland waterway shipments where seller was to provide insurance.)
DAP – Delivered at Place (Named place of destination)
The Incoterm (delivery term) under which the seller is responsible for delivering the goods, export cleared, to a named destination place, on-board the transportation conveyance, available (“at the disposal of the buyer”) for unloading by the buyer. Under DAP terms, the buyer assumes the cost and risk of unloading at the named destination place and for customs clearance. This term may be used with anytransportation mode, including through intermodal transportation, and for international as well as domestic sales transactions.
DAT – Delivered at Terminal (Named place of destination)
The Incoterm (delivery term) under which the seller is responsible for delivering the goods, export cleared, to the carrier’s terminal at the named destination location, unloaded from the delivering conveyance, available for customs clearance and/or pick-up by the buyer. Under DAT terms, the seller assumes the cost and risk of unloading at the named destination terminal, where as the buyer is responsible for customs clearance. This term may be used with any transportation mode, including through intermodal transportation, and for international as well as domestic sales transactions.
DDP – Delivered Duty Paid (Named place of destination)
The Incoterm (delivery term) under which the seller is responsible for arranging transportation of the goods through to the buyer’s door, and pays all costs required to accomplish this, including customs clearance, customs duty, and taxes due upon importation. Under pre-1990 versions of Incoterms, and under American Foreign Trade Definitions, this is also known as free domicile or free house. Under DDP terms, the seller has no obligation to insure the shipment. This Incoterm may be used with any transportation mode or combination of modes.