Inco Terms

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INCO TERMS

INTERNATIONAL COMMERCIAL TERMS

The INCOTERMS (International Commercial Terms)


is a universally recognized set of definitions of
international trade terms, such as FOB, CFR and
CIF, developed by the International Chamber of
Commerce (ICC) in Paris, France.
INCO TERMS: History

 The INCOTERMS was first published in 1936---INCOTERMS 1936.


 It is revised periodically to keep up with changes in the
international trade needs.
 The complete definition of each term is available from the current

publication---INCOTERMS 2000.
 Many importers and exporters worldwide are accustomed to and
may still use the INCOTERMS 1980, the predecessor of
INCOTERMS 1990 and INCOTERMS 2000.
INCO TERMS: Terms

E EXW Ex Works

FCA Free Carrier


F FAS Free Alongside Ship
FOB Free On Board

CFR Cost and Freight


CIF Cost, Insurance and Freight
C
CPT Carriage Paid To
CIP Carriage and Insurance Paid To

DAF Delivered At Frontier


DES Delivered Ex Ship
DEQ Delivered Ex Quay
D DDU Delivered Duty Unpaid
DDP Delivered Duty Paid
INCO TERMS: Ex Works
Ex Works
Ex means from. Works means factory, mill or
warehouse, which is the seller's premises. EXW applies
to goods available only at the seller's premises. Buyer is
responsible for loading the goods on truck or container
at the seller's premises, and for the subsequent costs and
risks.
In practice, it is not uncommon that the seller loads the
goods on truck or container at the seller's premises
without charging loading fee.
In the quotation, indicate the named place (seller's
premises) after the acronym EXW, for example EXW
Kobe and EXW San Antonio.
The term EXW is commonly used between the
manufacturer (seller) and export-trader (buyer), and the
export-trader resells on other trade terms to the foreign
buyers. Some manufacturers may use the term Ex
Factory, which means the same as Ex Works.
INCO TERMS: FCA

FCA  
Free Carrier
 
The delivery of goods on truck, rail car or
container at the specified point (depot) of
departure, which is usually the seller's premises,
or a named railroad station or a named cargo
terminal or into the custody of the carrier, at
seller's expense. The point (depot) at origin may
or may not be a customs clearance center. Buyer
is responsible for the main carriage/freight, cargo
insurance and other costs and risks.

In the export quotation, indicate the point of


departure (loading) after the acronym FCA, for
example FCA Hong Kong and FCA Seattle.

Some manufacturers may use the former terms


FOT (Free On Truck) and FOR (Free On Rail) in
selling to export-traders.
INCO TERMS: FCA

FAS  
Free Alongside Ship
 
Goods are placed in the dock shed or at the side of the
ship, on the dock or lighter, within reach of its loading
equipment so that they can be loaded aboard the ship, at
seller's expense. Buyer is responsible for the loading fee,
main carriage/freight, cargo insurance, and other costs
and risks.

In the export quotation, indicate the port of origin


(loading) after the acronym FAS, for example FAS New
York and FAS Bremen.

The FAS term is popular in the break-bulk shipments


and with the importing countries using their own
vessels.
INCO TERMS: FCA

FAS  
Free Alongside Ship
 
Goods are placed in the dock shed or at the side of the
ship, on the dock or lighter, within reach of its loading
equipment so that they can be loaded aboard the ship, at
seller's expense. Buyer is responsible for the loading fee,
main carriage/freight, cargo insurance, and other costs
and risks.

In the export quotation, indicate the port of origin


(loading) after the acronym FAS, for example FAS New
York and FAS Bremen.

The FAS term is popular in the break-bulk shipments


and with the importing countries using their own
vessels.
INCO TERMS: FOB
FOB  
Free On Board

The delivery of goods on board the


vessel at the named port of origin
(loading), at seller's expense. Buyer is
responsible for the main
carriage/freight, cargo insurance and
other costs and risks.
In international trade, avoid using the
shipping terms FOB Origin and FOB
Destination, which are not part of the
INCOTERMS (International Commercial
Terms).
INCO TERMS: CFR

CFR   Cost and Freight

The delivery of goods to the named port of


destination (discharge) at the seller's expense.
Buyer is responsible for the cargo insurance and
other costs and risks.
In the export quotation, indicate the port of
destination (discharge) after the acronym CFR, for
example CFR Karachi and CFR Alexandria.
Under the rules of the INCOTERMS 1990, the term
Cost and Freight is used for ocean freight only.
However, in practice, the term Cost and Freight
(C&F) is still commonly used in the air freight.
INCO TERMS: CIF
CIF  
Cost, Insurance and Freight

The cargo insurance and delivery of goods


to the named port of destination
(discharge) at the seller's expense. Buyer is
responsible for the import customs
clearance and other costs and risks.
In the export quotation, indicate the port of
destination (discharge) after the acronym
CIF, for example CIF Pusan and CIF
Singapore.
Under the rules of the INCOTERMS 1990,
the term CIF is used for ocean freight only.
However, in practice, many importers and
exporters still use the term CIF in the air
freight.
INCO TERMS: CPT

CPT  
Carriage Paid To
 
The delivery of goods to the named
place of destination (discharge) at
seller's expense. Buyer assumes the
cargo insurance, import customs
clearance, payment of customs duties
and taxes, and other costs and risks.
In the export quotation, indicate the
place of destination (discharge) after the
acronym CPT, for example CPT Los
Angeles and CPT Osaka.
INCO TERMS: CIP
CIP  
Carriage and Insurance Paid To
 
The delivery of goods and the cargo
insurance to the named place of
destination (discharge) at seller's
expense. Buyer assumes the import
customs clearance, payment of
customs duties and taxes, and other
costs and risks.
In the export quotation, indicate the
place of destination (discharge) after the
acronym CIP, for example CIP Paris
and CIP Athens.
INCO TERMS: DAF

DAF   Delivered At Frontier


 
The delivery of goods to the specified
point at the frontier at seller's expense.
Buyer is responsible for the import
customs clearance, payment of
customs duties and taxes, and other
costs and risks.
In the export quotation, indicate the
point at frontier (discharge) after the
acronym DAF, for example DAF
Buffalo and DAF Welland.
INCO TERMS: DES

DES  
Delivered Ex Ship
 
The delivery of goods on board the
vessel at the named port of destination
(discharge), at seller's expense. Buyer
assumes the unloading fee, import
customs clearance, payment of
customs duties and taxes, cargo
insurance, and other costs and risks.
In the export quotation, indicate the port
of destination (discharge) after the
acronym DES, for example DES
Helsinki and DES Stockholm.
INCO TERMS: DEQ
DEQ  
Delivered Ex Quay
 
The delivery of goods to the quay (the
port) at destination at seller's expense.
Seller is responsible for the import
customs clearance and payment of
customs duties and taxes at the buyer's
end. Buyer assumes the cargo
insurance and other costs and risks.

In the export quotation, indicate the port


of destination (discharge) after the
acronym DEQ, for example DEQ
Libreville and DEQ Maputo.
INCO TERMS: DDU

DDU  
Delivered Duty Unpaid
 
The delivery of goods and the cargo
insurance to the final point at destination,
which is often the project site or buyer's
premises, at seller's expense. Buyer
assumes the import customs clearance and
payment of customs duties and taxes. The
seller may opt not to insure the goods at
his/her own risks.

In the export quotation, indicate the point of


destination (discharge) after the acronym
DDU, for example DDU La Paz and DDU
Ndjamena.
.
INCO TERMS: DDP
DDP  
Delivered Duty Paid
 
The seller is responsible for most of the
expenses, which include the cargo
insurance, import customs clearance, and
payment of customs duties and taxes at the
buyer's end, and the delivery of goods to the
final point at destination, which is often the
project site or buyer's premises. The seller
may opt not to insure the goods at his/her
own risks.

In the export quotation, indicate the point of


destination (discharge) after the acronym
DDP, for example DDP Bujumbura and
DDP Mbabane.
.

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