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  Incoterms  
 

What are Incoterms ?

Incoterms or INternations COmmercial TERMS are a set of simple three letter codes which represent the different ways international shipments may be organized. the allow sellers and buyers from different cultures and legal systems to decide at what point the ownership and paying for freight, insurance and customs cost transfer from one to the others. There are four groups of Incoterms -  "E", "F", "C" & "D"

Group E:

EXW or Ex Works (name place):
Under EXW, the seller minimizes his risk by only making the goods available at his own premises.
Carriage of goods to be arranged by the buyer.
Risk transfers from the seller to the buyer when the goods are at the disposal of the buyer.
Cost transfers from the seller to the buyer when the goods are at the disposal of the buyer.

Group E:

Under F terms, and under FCA unless otherwise agreed, the seller arranges and pays for the pre-carriage in the country of export.

FCA or Free Carrier (named placed):
Carriage of goods to be arranged by the buyer or by the seller on the buyer's behalf.
Risk transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place.
Cost transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place.

FAS or Free Alongside Ship (named place):
Carriage of goods to be arranged by the buyer.
Risk transfers from the seller to the buyer when the goods have been placed alongside the ship.
Cost transfers from the seller to the buyer when the goods have been placed alongside the ship.

FOB or Free on Board (named place):
Carriage of goods to be arranged by the buyer.
Risk transfers from the seller to the buyer when the goods pass the ship's rail.
Cost transfers from the seller to the buyer when the goods pass the ship's rail.

Group C:

Under C terms, the seller arrranges and pays for the main carriage but without assuming the risk of the main carriage. CFR or Cost & Freight (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods pass the ship's rail.
Cost transfers at port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.

CIF or Cost, Insurance & Freight (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods pass the ship's rail.
Cost transfers at port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.

CPT or Carriage Paid To (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods are delivered to the carrier.
Cost transfers at port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.

CIP or Carriage Insurance Paid (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods are delivered to the carrier.
Cost transfers at port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage

Group D:

Under D terms, the seller's cost/risk is maximized because he must make the goods available upon arrival the agreed destination.

DAF or Delivered at Frontier (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods have been delivered at the frontier.
Cost transfers from the seller to the buyer when the goods have been delivered at the frontier.

DES or Delivered Ex Ship (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship.
Cost transfers from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship.

DEQ or Delivered Ex Quay (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods are placed at the disposal of the buyer.
Cost transfers from the seller to the buyer when the goods are placed at the disposal of the buyer.

DDP or Delivered Duty Paid (named place):
Carriage of goods to be arranged by the seller.
Risk transfers from the seller to the buyer when the goods are placed at the disposal of the buyer.
Cost transfers from the seller to the buyer when the goods are placed at the disposal of the buyer.

 
 
 
 
 
 
 
 
 
   
 

 

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