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.
All modes of Transport
EXW (Ex Works)
Freight Seller’s premises.
Risk Seller’s premises.
Details
Seller responsible for making the goods available at the seller’s premises. Buyer bears the full risk from there to destination.
CPT (Carriage Paid to)
Freight Destination.
Risk First freight handler.
Details
Seller delivers goods to the carrier at agreed place of delivery and pays transport to the named destination. Risk is transferred at place of delivery, whereas seller pays for transport to the destination.
DAT (Delivered at Terminal)
Freight Destination.
Risk Destination.
Details
Seller delivers goods unloaded at a specified place inside agreed terminal. Risk is transferred as soon as goods have been unloaded.
DPP (Delivered Duty Paid)
Freight Destination.
Risk Destination.
Details
Seller responsible for bringing goods to the destination, paying any duty and making the goods available to buyer. Risk transfers as soon as buyer has access to goods ready for unloading at agreed destination.
FCA (Free Carrier)
Freight Freight handler.
Risk Freight handler.
Details
Seller responsible for delivery to the custody of carrier, identified by the buyer. Risk is transferred when loading has taken place.
CIP (Carriage and Insurance Paid to)
Freight Destination.
Risk First freight handler.
Details
Seller delivers goods to carrier at agreed place of delivery and pays for transport and insurance to named destination. Risk transfers at the place of delivery, whereas seller pays for transport and insurance to the destination.
DAP (Delivered at Place)
Freight Place of destination.
Risk Arriving means of transport at destination.
Details
Seller delivers goods to disposal of buyer on arriving means of transport, at agreed place. Seller assumes risk until goods are made ready for unloading from the arriving means of transport.
Sea and Inland Waterways
FAS (Free Alongside Ship)
Freight Shipside in port of departure.
Risk Shipside in port of departure.
Details
Seller is responsible for delivery of goods at quay alongside the ship. From this point onwards, risk lies with buyer.
CRF (Cost and Freight)
Freight Port of destination.
Risk On board ship.
Details
Seller covers cost of freight, duty unpaid, to named port of destination. Risk is transferred as soon as the goods have been set down inside ship.
FOB (Free on Board)
Freight On board ship.
Risk On board ship.
Details
Seller responsible for delivery of goods loaded on board the ship. Risk is transferred as soon as goods have been set down inside ship.
CIF (Cost, Insurance and Freight)
Freight Port of destination.
Risk Port of destination.
Details
Seller covers cost of insurance and freight, duty unpaid, to named port of destination. Risk is transferred as soon as the goods have been set down inside ship.
