What are Incoterms

Incoterms are only part of the contract for sale. However, they are an integral part of the international transaction. Incoterms deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Incoterms are always used with a geographical location and do not deal with transfer of title.

Brief Descriptions of Incoterms

Incoterms are standardized definitions of commonly used shipping and trade terms that cover issues such as control of goods and financial responsibilities such as payment of cargo insurance and freight. Incoterms provide traders with a common set of rules outlining each party’s obligations, thus reducing misunderstandings.

A listing of Incoterms

Departure Main Carriage paid by Buyer Main Carriage paid by Seller Arrival
EXW: EX Works FCA: Free Carrier CFR: Cost and Freight DAT: Delivered at Terminal
  FAS: Free Alongside Ship CIF: Cost Insurance Freight DAP:  Delivered at Place
  FOB: Free on Board CPT: Carraige Paid to DDP: Delivered Duty Paid
    CIP Carriage and Insurance Paid to

DDU: Delivered Duty Unpaid

 

 

Table of Current Incoterms and responibilities

incoterms