Incoterms rules have become an important part of the everyday language of commerce. The terms are included in sales contracts for goods around the world, define the rules and provide guidance for importers, exporters, lawyers, carriers, insurers and students studying international trade.
RULES FOR ANY KIND OR KINDS OF TRANSPORT
EXW - Ex Works
"Ex Works / Ex Works" means that the seller delivers when he places the goods at the disposal of the buyer on his premises or at another agreed place (ie in a factory, warehouse, etc.). The seller is not obliged to load the goods into any vehicle, nor is he obliged to comply with the formalities required for export, if any.
FCA - Free Carrier
"Free Carrier" means that the seller hand over the goods to the carrier or another person nominated by the buyer at his premises or at another specified location. The parties are strongly encouraged to identify the item as clearly as possible at the named place of delivery, as the risk passes to the purchaser at that item.
CPT - Carriage Paid to
"Carriage Paid to" means that the seller transfers the goods to the carrier or another person nominated by the seller at the agreed place (if such a place is agreed by the parties) and that the seller is obliged to conclude a contract of carriage and bear the transportation costs necessary to deliver the goods to the agreed destination.
CIP - Carriage and Insurance Paid to
"Carriage and Insurance Paid to" means that the seller transfers the goods to the carrier or another person nominated by the seller at the agreed place (if such a place is agreed by the parties) and that the seller is obliged to conclude a contract of carriage and bear the transportation costs, necessary to deliver the goods to the agreed destination. The seller also concludes an insurance contract covering the risk of loss or damage to the goods during carriage.
DAT - Delivered at Terminal
"Delivered at Terminal" means that the seller delivers when the goods, unloaded from the arriving vehicle, are placed at the disposal of the buyer at the agreed terminal at the named port or place of destination. "Terminal" includes any place, whether closed or not, such as a quay, warehouse, container yard, or road, rail or air cargo terminal. The seller bears all risks associated with the delivery of the goods and their unloading at the terminal at the named port or destination.
DAP - Delivered at Place
"Delivered at Place" means that the seller delivers when the goods are placed at the disposal of the buyer on the arrived vehicle ready for unloading at the agreed place of destination. The seller bears all risks associated with the delivery of the goods to the named place.
DDP - Delivered Duty Paid
"Delivered Duty Paid" means that the seller delivers when the goods are delivered to the buyer, cleared of the customs duties required for import, in an arriving vehicle ready for unloading at the named place of destination. The seller bears all costs and risks associated with the delivery of the goods to the place of destination, and is obliged to complete the customs formalities required not only for export, but also for import, pay any fees charged for export and import, and complete all customs formalities.
RULES FOR SEA AND INLAND WATER TRANSPORT
FAS - Free Alongside Ship / Free along the side of the ship
"Free Alongside Ship" means that the seller has met his delivery obligation when the goods are placed alongside the vessel nominated by the buyer (ie on a quay or barge) at the agreed port of shipment. The risk of loss or damage to the goods passes when the goods are positioned along the side of the ship, and from that moment the buyer bears all costs.
FOB - Free on Board
"Free on Board" means that the seller delivers the goods on board a vessel nominated by the buyer at the named port of shipment, or arranges for the goods so delivered. The risk of loss of or damage to the goods passes when the goods are on board and from that moment the buyer bears all costs.
CFR - Cost and Freight
"Cost and Freight" means that the seller delivers the goods on board or provides the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller is obliged to conclude a contract and pay all costs and freight necessary to deliver the goods to the named port of destination.
CIF - Cost Insurance and Freight
"Cost Insurance and Freight" means that the seller delivers the goods on board the ship or delivers the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller is obliged to conclude a contract and pay all costs and freight necessary to deliver the goods to the named port of destination. The seller also concludes an insurance contract covering the risk of loss or damage to the goods during carriage.