INCOTERMS
Main INCOTERMS and definition
It is essential to clarify the chosen Incoterm in the sales contract to avoid misunderstandings and ensure that both parties understand their respective responsibilities and liabilities throughout the international trade transaction.
EXW (Ex Works)
The seller makes the goods available at their premises, and the buyer is responsible for all transportation costs, customs clearance, and risks from the seller’s location.
FCA (Free Carrier)
The seller delivers the goods, cleared for export, to the carrier chosen by the buyer at a specified location. The buyer bears the transportation costs and assumes the risk after the goods have been delivered to the carrier.
CPT (Carriage Paid To)
The seller pays for the carriage of the goods to the named destination, but the risk transfers to the buyer once the goods are handed over to the carrier.
CIP (Carrier and Insurance Paid To)
Similar to CPT, but the seller is also responsible for obtaining insurance against the buyer’s risk of loss or damage during transportation.
DAP (Delivered at Place)
The seller delivers the goods to the buyer at the named place of destination, ready for unloading, but not cleared for import. The seller bears all risks and costs until the goods are delivered.
DPU (Delivered at Place Unloaded)
This term replaces the previous DAT (Delivered at Terminal). The seller is responsible for delivering the goods to the buyer at the named place of destination, unloaded from the arriving means of transport.
DDP (Delivered Duty Paid)
The seller is responsible for delivering the goods to the buyer at the named place of destination, cleared for import, and paying all applicable duties and taxes.
FAS (Free Alongside Ship)
The seller delivers the goods alongside the vessel at the named port of shipment. The buyer bears all costs and risks from that point forward.
FOB (Free On Board)
The seller delivers the goods on board the vessel at the named port of shipment. The buyer bears all costs and risks from that point forward.
CFR (Cost and Freight)
The seller pays the costs and freight to bring the goods to the named port of destination. The risk transfers to the buyer once the goods are on board the vessel.
CIF (Cost, Insurance and Freight)
Similar to CFR, but the seller also provides insurance coverage
against the buyer’s risk of loss or damage during transportation.
