EXW - Ex Works (Named Place) : Incoterms

INCOTERMS
EXW Ex Works (named place)

The seller makes the goods available at their premises. This term places
the maximum obligation on the buyer and minimum obligations on the
seller. The Ex Works term is often used when making an initial quotation
for the sale of goods without any costs included. EXW means that a buyer
incurs the risks for bringing the goods to their final destination. Either the
seller does not load the goods on collecting vehicles and does not clear
them for export, or if the seller does load the goods, he does so at buyer's
risk and cost. If parties wish seller to be responsible for the loading of the
goods on departure and to bear the risk and all costs of such loading, this
must be made clear by adding explicit wording to this effect in the
contract of sale. The buyer arranges the pickup of the freight from the
supplier's designated ship site, owns the in-transit freight, and is
responsible for clearing the goods through Customs. The buyer is also
responsible for completing all the export documentation. These
documentary requirements may cause two principal issues. Firstly, the
stipulation for the buyer to complete the export declaration can be an
issue in certain jurisdictions (not least the European Union) where the
customs regulations require the declarant to be either an individual or
corporation resident within the jurisdiction. Secondly, most jurisdictions
require companies to provide proof of export for tax purposes. In an Ex
Works shipment, the buyer is under no obligation to provide such proof, or
indeed to even export the goods. It is therefore of utmost importance that
these matters are discussed with the buyer before the contract is agreed.
It may well be that another Incoterm, such as FCA seller's premises, may
be more suitable.
FCA Free Carrier (named place of delivery)

The seller delivers the goods, cleared for export, at a named place. This
can be to a carrier nominated by the buyer, or to another party nominated
by the buyer. It should be noted that the chosen place of delivery has an
impact on the obligations of loading and unloading the goods at that
place. If delivery occurs at the seller's premises, the seller is responsible
for loading the goods on to the buyer's carrier. However, if delivery occurs
at any other place, the seller is deemed to have delivered the goods once
their transport has arrived at the named place; the buyer is responsible for
both unloading the goods and loading them onto their own carrier.
CPT Carriage Paid To (named place of destination)

CPT replaces the venerable C&F (cost and freight) and CFR terms for all
shipping modes outside of non-containerised seafreight. The seller pays
for the carriage of the goods up to the named place of destination. Risk
transfers to buyer upon handing goods over to the first carrier at the place
of shipment in the country of Export. The Shipper is responsible for origin
costs including export clearance and freight costs for carriage to named
place (usually a destination port or airport). The shipper is not responsible
for delivery to the final destination (generally the buyer's facilities), or for
buying insurance. If the buyer does require the seller to obtain insurance,
the Incoterm CIP should be considered.
CIP Carriage and Insurance Paid to (named place of

destination)
This term is broadly similar to the above CPT term, with the exception that
the seller is required to obtain insurance for the goods while in transit. CIP
requires the seller to insure the goods for 110% of their value under at
least the minimum cover of the Institute Cargo Clauses of the Institute of
London Underwriters (which would be Institute Cargo Clauses (C)), or any
similar set of clauses. The policy should be in the same currency as the
contract. CIP can be used for all modes of transport, whereas the
equivalent term CIF can only be used for non-containerised seafreight.
DAT Delivered at Terminal (named terminal at port or

place of destination)
This term means that the seller covers all the costs of transport (export
fees, carriage, unloading from main carrier at destination port and
destination port charges) and assumes all risk until destination port or
terminal. The terminal can be a Port, Airport, or inland freight interchange.
Import duty/taxes/customs costs are to be borne by Buyer.
DAP Delivered at Place (named place of destination)

Can be used for any transport mode, or where there is more than one
transport mode. The seller is responsible for arranging carriage and for
delivering the goods, ready for unloading from the arriving conveyance, at
the named place. Duties are not paid by the seller under this term. The
seller bears all risks involved in bringing the goods to the named place.
DDP Delivered Duty Paid (named place of destination)

Seller is responsible for delivering the goods to the named place in the
country of the buyer, and pays all costs in bringing the goods to the
destination including import duties and taxes. The seller is not responsible
for unloading. This term is often used in place of the non-Incoterm "Free In
Store (FIS)". This term places the maximum obligations on the seller and
minimum obligations on the buyer. With the delivery at the named place of
destination all the risks and responsibilities are transferred to the buyer
and it is considered that the seller has completed his obligations
Sea and Inland Waterway Transport
To determine if a location qualifies for these four rules, please refer to

'United Nations Code for Trade and Transport Locations (UN/LOCODE)'. The
four rules defined by Incoterms 2010 for international trade where
transportation is entirely conducted by water are as per the below. It is
important to note that these terms are generally not suitable for
shipments in shipping containers; the point at which risk and responsibility
for the goods passes is when the goods are loaded on board the ship, and
if the goods are sealed into a shipping container it is impossible to verify
the condition of the goods at this point. Also of note is that the point at
which risk passes under these terms has shifted from previous editions of
Incoterms, where the risk passed at the ship's rail.
FAS Free Alongside Ship (named port of shipment)

The seller delivers when the goods are placed alongside the buyer's vessel
at the named port of shipment. This means that the buyer has to bear all
costs and risks of loss of or damage to the goods from that moment. The
FAS term requires the seller to clear the goods for export, which is a
reversal from previous Incoterms versions that required the buyer to
arrange for export clearance. However, if the parties wish the buyer to
clear the goods for export, this should be made clear by adding explicit
wording to this effect in the contract of sale. This term can be used only
for sea or inland waterway transport.
FOB Free on Board (named port of shipment)

FOB means that the seller pays for delivery of goods to the vessel
including loading. The seller must also arrange for export clearance. The
buyer pays cost of marine freight transportation, insurance, unloading and
transportation cost from the arrival port to destination. The buyer arranges
for the vessel, and the shipper must load the goods onto the named vessel
at the named port of shipment according to the dates stipulated in the
contract of sale as informed by the buyer. Risk passes from the seller to
the buyer when the goods are loaded aboard the vessel. This term has
been greatly misused over the last three decades ever since Incoterms
1980 explained that FCA should be used for container shipments.
CFR Cost and Freight (named port of destination)

The seller pays for the carriage of the goods up to the named port of
destination. Risk transfers to buyer when the goods have been loaded on
board the ship in the country of Export. The Shipper is responsible for
origin costs including export clearance and freight costs for carriage to
named port. The shipper is not responsible for delivery to the final
destination from the port (generally the buyer's facilities), or for buying
insurance. If the buyer does require the seller to obtain insurance, the
Incoterm CIF should be considered. CFR should only be used for noncontainerized seafreight; for all other modes of transport it should be
replaced with CPT.
CIF Cost,
destination)
Insurance
and
Freight
(named
port
of
This term is broadly similar to the above CFR term, with the exception that
the seller is required to obtain insurance for the goods while in transit to
the named port of destination. CIF requires the seller to insure the goods
for 110% of their value under at least the minimum cover of the Institute
Cargo Clauses of the Institute of London Underwriters (which would be
Institute Cargo Clauses (C)), or any similar set of clauses. The policy
should be in the same currency as the contract. CIF should only be used
for non-containerized seafreight; for all other modes of transport it should
be replaced with CIP.
DAF Delivered at Frontier (named place of delivery)
This term can be used when the goods are transported by rail and road.
The seller pays for transportation to the named place of delivery at the
frontier. The buyer arranges for customs clearance and pays for
transportation from the frontier to his factory. The passing of risk occurs at
the frontier.
DES Delivered Ex Ship
Where goods are delivered ex ship, the passing of risk does not occur until
the ship has arrived at the named port of destination and the goods made
available for unloading to the buyer. The seller pays the same freight and
insurance costs as he would under a CIF arrangement. Unlike CFR and CIF
terms, the seller has agreed to bear not just cost, but also Risk and Title up
to the arrival of the vessel at the named port. Costs for unloading the
goods and any duties, taxes, etc. are for the Buyer. A commonly used term
in shipping bulk commodities, such as coal, grain, dry chemicals; and
where the seller either owns or has chartered, their own vessel.
DEQ Delivered Ex Quay (named port of delivery)
This is similar to DES, but the passing of risk does not occur until the
goods have been unloaded at the port of discharge. This is no more. In ICC
2010 it is deleted
DDU Delivered Duty Unpaid (named place of destination)
This term means that the seller delivers the goods to the buyer to the
named place of destination in the contract of sale. A transaction in
international trade where the seller is responsible for making a safe
delivery of goods to a named destination, paying all transportation
expenses but not the duty. The seller bears the risks and costs associated
with supplying the goods to the delivery location, where the buyer
becomes responsible for paying the duty and other customs clearing
expenses.

EXW - Ex Works (Named Place) : Incoterms

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INCOTERMS

EXW Ex Works (named place)

FCA Free Carrier (named place of delivery)

CPT Carriage Paid To (named place of destination)

CIP Carriage and Insurance Paid to (named place of

DAT Delivered at Terminal (named terminal at port or

DAP Delivered at Place (named place of destination)

DDP Delivered Duty Paid (named place of destination)

Sea and Inland Waterway Transport

To determine if a location qualifies for these four rules, please refer to

FAS Free Alongside Ship (named port of shipment)

FOB Free on Board (named port of shipment)

CFR Cost and Freight (named port of destination)

DES Delivered Ex Ship

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