Incoterms
There are four categories of Incoterms.
Origin Terms
International Transportation Not Paid by the Seller
International Transportation PAID by Seller
Delivered at Named Port or Named Place at Destination
DAF | DES | DEQ | DDU | DDP
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Is intended to be used when the buyer is going to take responsibility for loading the goods onto a carrier selected by the buyer without assistance from the seller. If the seller is going to load the goods on the carriers selected and contracted by the buyer, the FCA LOADED should be used.
Mode of Transportation: Ex-Works can be used for any transportation mode.
International Transportation Not Paid by the Seller
Goods loaded on the Buyer's Carrier by the Seller, at the Seller's premises or other place of Origin. Buyer is responsible for Inland Transport from the named place.
When associated with a place of origin, should only be used when the responsibilities of the seller are limited to loading a carrier provided by the buyer, at the seller's dock. Also, that the buyer is going to take responsibility for transportation once the goods are loaded at the seller's dock.
Any Mode of Transport
FCA (Free Carrier, Not Unloaded)
Seller is responsible for loading the goods on the seller's carrier. The seller is responsible for Inland Transport from the place of origin to a Named Place. Seller makes goods available to the buyer, Not Unloaded from the seller's carrier.
Should only be used when the goods are made available to the buyer at the dock of the carrier chosen by the buyer, or other named place in the country of origin requested by the buyer.
Mode of Transportation: Free Carrier can be use for any mode of transportation.
Seller is responsible for Inland Transport from the place of origin to the Named Port of Export. Seller makes goods available to the buyer, once the goods are placed within the reach of the ship's tackle.
Requires the buyer to notify the seller of the arrangements for international transportation and the date and place of delivery. This requires the buyer to have established a relationship with a carrier, forwarder or agent at the ocean port of loading. The seller is responsible for all costs and transport, until goods are placed alongside the vessel. The term FAS should only be used when the buyer is going to take responsibility for international transportation once the goods have been received by the carrier and are placed within the reach of the ship's tackle.
Mode of Transportation: is intended to be used only for ocean freight shipments.
(Port to Port)
FOB (Free On Board Ocean Vessel)
Seller is responsible for Inland Transport from the place of origin to the Named Port of Export. Seller makes goods available to the buyer when goods are loaded on board the vessel.
Is intended for use when it is important that the goods pass the ship's rail to evidence delivery. This term is most commonly used for bulk cargo and port to port shipments of goods not loaded in an ocean container.
Mode of Transportation: is intended to be used only for ocean freight shipments where it is important that the goods pass the ship's rail. Goods shipped in an ocean container are more appropriately shipped under FCA terms.
International Transportation PAID by Seller
Seller is responsible for placing the goods on board an ocean vessel and paying for international transport to the port of destination.
Is intended for use in shipping ocean freight pier to pier cargo that is not containerized, when it is important that the goods pass the ship's rail to evidence delivery, and the seller is contracting and paying for international carriage. Specifically, it would not be an appropriate term to use when the goods have been loaded into an ocean container.
As a result, this term is usually limited to oversized goods that cannot be loaded into a container, overweight shipments that would exceed the weight limitations of shipping in a container, or less than container load shipments.
Mode of Transportation: is intended to be use only for ocean freight shipments that are not loaded in an ocean container.
CIF (Cost, Insurance and Freight)
The seller is responsible for placing the goods on board an ocean vessel. Seller must pay for international transport and insurance to the port of destination.
Is intended for use in shipping Pier to Pier Ocean cargo that is not containerized, when it is important that the goods pass the ship's rail to evidence delivery, and the seller is contracting for insurance and carriage. The insurance purchased is to be for a minimum amount of coverage, once the goods are loaded on the ocean vessel, and is to include insurance coverage to cover the buyer's insurable interests to the port of destination stated on the bill of lading. The insurance is to cover 110% of the CFR value of the goods.
Mode of Transportation: is intended to be used only for ocean freight shipments that are not loaded in an ocean container.
Seller is responsible for placing the goods on an Air or Ocean Carrier (Containerized, Roll-On, Roll Off) at the port of export. Seller must pay for international transport to the named place of destination.
Is intended for use in shipping by air freight, and ocean shipments that are containerized or can be rolled on and off the vessel. This term is also used for multimodal ocean shipments. The philosophy in the use of this term is that it is not important that the goods pass the ship's rail to evidence delivery, and the seller is contracting and paying for international carriage to a named place in a foreign country. Also, the term CPT allows for the seller to arrange and pay for transportation from a named place at origin (which could be the seller's dock) to a named place or destination in a foreign country.
Mode of Transportation: is intended to be use for air freight, containerized ocean freight and roll-on-roll-off ocean freight shipments.
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CIP (Carriage and Insurance Paid To)
Seller is responsible for placing the goods on an Air or Ocean Carrier (Containerized Roll-On, Roll Off cargo) at the port of export. Seller must pay for international transport and insurance to the named place of destination.
Mode of Transportation: is intended to be used for air freight, containerized ocean freight and roll-on-roll-off ocean freight shipments.
Delivered at Named Port or Named Place at Destination
DAF (Delivered At Frontier, By Land)
Seller is responsible for transporting the goods, by any mode, except that delivery to the named place at the frontier must be made by surface transportation, not unloaded.
Intends that the goods be delivered at a frontier or border of a given country, by land. This can apply to the border of the country of the seller, or at the border of any country where the buyer will take responsibility for customs clearance and further transportation. The only difference is the extent to which the seller will need to contract for transportation and incur costs in transiting other countries to arrive at the place designated by the buyer. If the term FCA can be applied to a given transaction, it is recommended that DAF not be used.
Mode of Transportation: Delivered at Frontier can be used for any mode of transportation, but delivery must be made by land
The seller is responsible for the arrival of the goods at the named destination port. The buyer is responsible for unloading the goods from the Ocean Vessel.
Is intended for use in shipping goods by ocean freight to a port designated by the buyer. Under this term, the seller is responsible for the arrival of the ship at the port of unloading. A further responsibility of the seller is that the goods must be available for unloading by the buyer at the designated port.
Mode of Transportation: is intended to be used for ocean freight shipments only.
Seller is responsible for the arrival of the goods at the named destination port. The seller is also responsible for placing the goods on the Quay or Pier at the named destination port.
Is intended for use in shipping goods by ocean freight to a port designated by the buyer. Under the term DEQ, the seller is responsible for the arrival and unloading of the goods from the ship at the port of unloading. While the DEQ term includes the cost of unloading and any fees charged by the port relative to this service, the requirement for customs clearance has been eliminated from this term in the revisions effective January 1, 2000.
Mode of Transportation: Is intended to be used for ocean freight shipments only.
Is intended for use in shipping goods by any means of transport.
The term DDU is most typically used when the point of delivery is a place other than the port or airport of unloading for the international transportation of the goods. The further transportation from the destination port can be included under the international bill of landing or a separate bill of landing issued upon arrival of the goods at the air or ocean port. The seller is responsible for all transportation costs up to the destination designated by the buyer. The cost of customs formalities if the goods are transiting foreign countries is also for the account of the seller. The buyer must pay all fees, duties and taxes incurred in the destination country relative to the clearance of the goods through customs.
Mode of Transportation: is intended to be used for any mode of transportation.
Is intended for use in shipping goods by any means of transport to a named place. The term is most typically used when the point of delivery is a place other than the port or airport of unloading for the international transportation of the goods. The further transportation from the destination port can be included under the international bill of landing or a separate bill of lading issued upon arrival of the goods at the air or ocean port. The seller is responsible for all transportation costs, customs formalities, duties, taxes and any other expenses normally incurred in the course of transportation and customs clearance of goods entering the foreign country. The seller is also responsible for obtaining any import permit or import license that may be required to satisfy governmental or industry regulation for entering goods into the foreign country.
Mode of Transportation: is intended to be used for any mode of transportation.