Incoterms (International Commercial Terms) are a set of internationally recognized rules that define the responsibilities of sellers and buyers in the shipment and delivery of goods. They are published by the International Chamber of Commerce (ICC) and are essential for international trade. Below is a list of the current Incoterms (as of 2020) along with explanations:
1. EXW (Ex Works)38 words
1. EXW (Ex Works)
- Seller’s Responsibility: Makes the goods available at their premises or another named place (factory, warehouse, etc.).
- Buyer’s Responsibility: Bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.
2. FCA (Free Carrier)40 words
2. FCA (Free Carrier)
- Seller’s Responsibility: Delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.
- Buyer’s Responsibility: Takes on all risks and costs after the goods have been delivered to the carrier.
3. CPT (Carriage Paid To)26 words
3. CPT (Carriage Paid To)
- Seller’s Responsibility: Pays for the carriage of goods to the named destination.
- Buyer’s Responsibility: Assumes the risk once the goods are handed over to the carrier.
4. CIP (Carriage and Insurance Paid To)28 words
4. CIP (Carriage and Insurance Paid To)
- Seller’s Responsibility: Pays for carriage and insurance to the named destination.
- Buyer’s Responsibility: Takes on risk after the goods are delivered to the carrier but has insurance coverage.
5. DAP (Delivered At Place)39 words
5. DAP (Delivered At Place)
- Seller’s Responsibility: Delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place.
- Buyer’s Responsibility: Responsible for unloading costs and further transportation if required.
6. DPU (Delivered at Place Unloaded)21 words
6. DPU (Delivered at Place Unloaded)
- Seller’s Responsibility: Delivers the goods and unloads them at the named place.
- Buyer’s Responsibility: Takes responsibility once the goods are unloaded.
7. DDP (Delivered Duty Paid)36 words
7. DDP (Delivered Duty Paid)
- Seller’s Responsibility: Bears all costs and risks, including duties, taxes, and customs clearance, until the goods are delivered at the buyer’s premises or another named place.
- Buyer’s Responsibility: Simply receives the goods at the named place.
8. FAS (Free Alongside Ship)26 words
8. FAS (Free Alongside Ship)
- Seller’s Responsibility: Delivers the goods alongside the vessel at the named port of shipment.
- Buyer’s Responsibility: Takes on all costs and risks from that point forward.
9. FOB (Free On Board)30 words
9. FOB (Free On Board)
- Seller’s Responsibility: Delivers the goods on board the vessel at the named port of shipment.
- Buyer’s Responsibility: Bears all costs and risks once the goods are on board the ship.
10. CFR (Cost and Freight)31 words
10. CFR (Cost and Freight)
- Seller’s Responsibility: Pays the costs and freight to bring the goods to the port of destination.
- Buyer’s Responsibility: Bears the risk from the time the goods are on board the ship.
11. CIF (Cost, Insurance, and Freight)33 words
11. CIF (Cost, Insurance, and Freight)
- Seller’s Responsibility: Pays the costs, freight, and insurance to bring the goods to the port of destination.
- Buyer’s Responsibility: Assumes risk once the goods are on board the ship but has insurance coverage.
12. FOB Origin (Free on Board Origin)23 words
12. FOB Origin (Free on Board Origin)
- Seller’s Responsibility: Delivers goods on board at their origin.
- Buyer’s Responsibility: Takes responsibility once the goods are on board at the origin point.