(1) EX Works/EXW:
The buyer bears all expenses and risks involved in taking the goods from the seller's premises to the requested destination. The seller's obligation is to make the goods available at his place of business (business, factory, warehouse). This term represents the minimum obligation of the seller. This term can be used in all modes of transport.
(2) Free carrier/FCA:
The seller's obligation is to deliver the goods clear of customs for export, in the custody of the carrier specified by the buyer at a specific place or point. If no specified point is indicated by the buyer, the seller may choose the place where the carrier is required to take the goods into his charge. When the seller's assistance is required in writing the contract with the carrier, the seller may act at the risk and expense of the buyers. This term can be used across all modes of transportation.
(3) Carriage Paid To/CPT:
The seller pays the freight to transport the goods to the named destination. The risk of loss or damage to the goods that occurs after the delivery of the goods is transferred from the seller to the buyer. This term requires the seller to clear customs of the goods at the point of export, and can be used in all modes of transport.
(4) Carriage & Insurance Paid To/CIP:
The seller has the same obligations in the CPT but has the responsibility to obtain insurance against the buyer's risk of loss or damage to the goods in transit. The seller is responsible for customs clearance of the goods to the point of export but only minimum coverage is required. The term can be used in all modes of transport.
(5) Delivered At Terminal / DAT:
The seller begins the carriage of the goods when they are unloaded from the means by which they are transported from the point of delivery (at the seller), and they are placed at the disposal of the buyer at a designated station / port / or place of destination. “Terminal” includes a berth, warehouse, container yard, road, railway or airport. The two parties have to agree on a terminal and if possible a point within the terminal at which point the risk is transferred from the seller to the buyer. If it is intended that the seller bears all costs and responsibilities from one station to another point, DDP or DAP may apply.
Obligations / Responsibilities:
- The seller is responsible for the costs and risks of bringing the goods to the point specified in the contract.
- Seller is responsible for export clearance procedures.
- The importer is responsible for transporting goods for import, arranging customs procedures for imports, and paying import duties.
If the selling parties intend to bear the risks and costs of taking the goods from the crossing to another place then the term DAP may be applied.
(6) Delivered At Place/DAP:
The seller transports the goods when they are placed at the disposal of the buyer when the means of transport arrive ready for unloading at the named place. The parties are advised to specify as clearly as possible the point in the agreed place of the party, because the transfer of risk at this stage from the seller to the buyer. If the seller is responsible for clearing the goods, paying duties etc., consideration should be given to the use of the term DDP.
Responsibilities:
- The seller bears the responsibility and risk to deliver the goods to the named place.
- The seller is required to clear customs for the goods for export.
- If the seller bears the costs of unloading at the destination, unless previously agreed, he is not entitled to recover any of those costs.
- The importer is responsible for effecting customs clearance, and paying any customs duties.
(7) Delivered Duty Paid/DDP:
The seller is responsible for delivering the goods to the named place in the importing country, including all costs and risks in bringing the goods to the destination in question. This includes duties, taxes and customs procedures. This term can be used regardless of the mode of transportation.
(8) Free Alongside Ship - Named port of shipment / FAS:
The seller must place the goods on the loading dock at the named port. The seller must clear the goods for export. This term is only suitable for sea carriage but not for multimodal shipping in containers (see Incoterms 2010, ICC Posted 715). This term is usually used for heavy transport or bulk cargo.
(9) Free On Board - Named port of shipment / FOB:
The seller must load the goods himself on board the ship nominated by the buyer. Costs and risks are split when the goods are actually on board (this rule is new!). The seller must clear the goods for export. This term applies to sea and inland water transport only but not to containerized multimodal sea transport (see Incoterms 2010, ICC Publication 715). The buyer must indicate to the seller the details of the vessel and the port where the goods are to be loaded, and there is no indication of, or designated, for the use of the carrier or agent. The term has been greatly misused over the past three decades since INCOTERMS 1980 explained that the FCA should be used for container shipping.
(10) Cost & Freight / CFR:
The seller must pay the shipping costs required in bringing the goods to the destination port. The risk of loss or damage is transferred from the seller to the buyer when the goods pass through the ship’s rail at the port of shipment. The seller is required to clear customs for the goods for export. You should only use this term for shipping or inland waterways.
(11) Cost, Insurance & Freight / CIF:
The seller has the same obligations under the CFR except that it is also required to provide insurance against the buyer's risk of loss or damage to the goods in transit. The seller is required to clear customs for the goods for export. You should only use this term for shipping or inland waterways.