What are Incoterms?
INCOTERMS are a set of three-letter standard trade terms most commonly used in international contracts for the sale of goods. It is essential that you are aware of your terms of trade prior to shipment.
EXW (EX Works)
EX Works EXW named place Incoterms® 2020 — is when the seller places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.).
FCA (Free Carrier)
Free Carrier FCA named place Incoterms® 2020 — This term may be used whatever mode or modes of transport will be used.
CPT (Carriage Paid To)
Carriage Paid To CPT named place Incoterms® 2020 — the seller must contract for the carriage of the goods and hand them over to the carrier. At this point, the risk passes to the buyer.
CIP (Carriage & Insurance Paid)
Carriage and Insurance Paid CIP to named place Incoterms® 2020 — The seller has the same responsibilities as CPT, but they also contract for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
DPU (Delivery at Place Unloaded)
Delivery at Place Unloaded DPU Incoterms® 2020 — The seller delivers when the goods, once unloaded are placed at the disposal of the buyer at a named place of destination.
DAP (Delivered at Place)
Delivered at Place DAP named place Incoterms® 2020 — The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
DDP (Delivered Duty Paid)
Delivered Duty Paid DDP named place of destination Incoterms® 2020 — The seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination.
FAS (Free Alongside Ship)
Free Alongside Ship FAS named port of shipment Incoterms® 2020 — The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment.
FOB (Free on Board)
Free On Board FOB named port of shipment Incoterms® 2020 — The time of delivery shall be deemed to be the time when the goods are loaded to the vessel designated by the buyer, on the designed date, and in the form prescribed by the port authorities
CFR (Cost & Freight)
Cost and Freight CFR named port of destination Incoterms® 2020 — the moment of delivery and transfer of risk is when the goods are on board the vessel. Also, the buyer can purchase already delivered goods.
CIF (Cost Insurance & Freight)
Cost Insurance and Freight CIF named port of destination Incoterms® 2020 — the products are delivered by the seller at the moment when the goods pass the ship’s side at the port of loading.
