Incoterms®

Incoterms® are a set of 11 rules established every 10 years by the International Chamber of Commerce (ICC).  Each Incoterm details buyers' and sellers' duties and obligations in the international sale of goods. 

Most importantly, each rule simplifies the tasks, costs, and risks the buyer or seller bears in each transaction. 

The 2020 Incoterms® are separated into four categories and two transportation types.

 

 

Categories of Incoterms

Category C - Main Carriage Paid

The seller assumes risk and cost while the goods are in transit. The seller is no longer responsible for once the goods are loaded onto a transport vehicle.

  • Cost And Freight - CFR

  • Cost, Insurance, And Freight - CIF

  • Carriage Paid To - CPT

  • Carriage And Insurance Paid To - CIP

 

Category D - Arrival

The seller is responsible for all transportation costs and must deliver the goods to the agreed-upon destination. Any mode of transport can be used in Category D.

  • Delivered At Terminal - DAT

  • Delivered At Place - DAP

  • Delivered Duty Paid - DDP

Category E - Departure

Category E assigns most of the responsibility to the buyer. After the seller makes the goods available at an agreed-upon location, the buyer must load and clear the goods for export.

  • EX Works - EXW

Category F - Main Carriage Unpaid

The seller is responsible for delivering the goods to the buyer's desired location. As soon as the goods are delivered, the buyer assumes responsibility.

  • Free Carrier - FCA

  • Free Alongside Ship - FAS

  • Free On Board - FOB

Any Mode(s) of Transport

EX Works

Seller is only responsible for having the goods packed made available at the seller’s premises. The buyer bears the full risk and cost from there to the destination, including the loading of the cargo.

Free Carrier

Seller is responsible for delivery to the named place. Seller is responsible for loading. Risk and cost are transferred to the buyer as soon as delivered at the named place. Unloading is the buyers responsibility.

Carriage Paid To

Seller arranges the transportation and costs to the named place at destination. Risk is transferred to the buyer once delivered at first carrier

Carriage And Insurance Paid To

Seller arranges the transportation and costs to the named place at destination. Risk is transferred to the buyer once delivered at first carrier.

Delivered At Place

Seller delivers the goods to the agreed place at destination. Seller assumes all cost and risk until the goods are ready for unloading at named place at destination.

Delivered At Place Unloaded

Seller assumes all costs and risks until the goods are unloaded at the agreed named place at destination. Buyer is responsible for Import customs formalities.

Delivered Duty Paid

Seller delivers the goods to the agreed place at destination. Seller assumes all cost, including import formalities, and risk until the goods are ready for unloading at named place at destination.

Sea & Inland Waterway Transport

Free Alongside Ship

Seller is responsible for delivery of the goods at the port alongside the vessel. From this point onward, risk and cost transfers to the buyer.

Free On Board

Seller is responsible for delivery of the goods loaded on board the vessel. Risk and cost are transferred as soon as the goods have been loaded onboard the vessel.

Cost And Freight 

Seller covers cost of freight to the named port of destination or place. Risk is transferred as soon as the goods have been loaded onboard the vessel.

Cost, Insurance And Freight

Seller covers cost of insurance and freight to the named port of destination or place. Risk is transferred as soon as the goods have been loaded onboard the vessel. Seller is required to obtain min. Insurance cover complying with Institute Cargo Clauses (C) in the buyers name.

 

 

 

Incoterms® 2020 will not apply unless incorporated into the contract of sale by clearly specifying that the contract is governed by Incoterms® 2020. Incoterms® are ICC’s standard definitions of trade terms and are internationally recognized as indispensable evidence of the buyer’s and seller’s responsibilities for delivery under a sales contract. This is a basic guide, we recommend you refer to the Handbook created by the ICC - International Chamber of Commerce for more detailed information regarding Incoterms® 2020. http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2020

 

View Incoterms Flyer