INCO TERMS

Definition

•Inco terms are standard trade definitions most commonly used in

international sales contracts which are devised and published by the
International Chamber of Commerce.

•ICC introduced the first version of Incoterms - short for "International

Commercial Terms" - in 1936

•Most contracts made after 1 January 2000 will refer to the latest edition of
Incoterms, which came into force on that date. The correct reference is to
"Incoterms 2000".

•Unless the parties decide otherwise, earlier versions of Incoterms - like

Incoterms 1990 - are still binding if incorporated in contracts that are
unfulfilled and date from before 1 January 2000.
Origin Terms

EXW
• Ex-Works, named place where shipment is available to the buyer, not
loaded.

• The seller will not contract for any transportation.

• This term thus represents the minimum obligation for the seller, and the
buyer has to bear all costs and risks involved in taking the goods from the
seller’s premises.

International Carriage NOT Paid by Seller

FCA
• Free Carrier, unloaded at the seller's dock OR a named place where
shipment is available to the international carrier or agent, not loaded.
This term can be used for any mode of transport.
FAS
• Free Alongside Ship, named ocean port of shipment.
The seller delivers when the goods are placed alongside the vessel at the
named port of shipment.

• The FAS term requires the seller to clear the goods for export.

FOB
• Free On Board vessel, named ocean port of shipment.
The seller delivers when the goods pass the ship’s rail at the named port of
shipment.

•This term is used for ocean shipments only where it is important that the
goods pass the ship's rail.
International Carriage Paid by the Seller

CFR
• Cost and Freight, named ocean port of destination.
• The seller delivers when the goods pass the ship’s rail in the port of
shipment.
• The seller must pay the costs and freight necessary to bring the goods to
the named port of destination
• But the risk of loss of or any damage to the goods, as well as any
additional costs due to events occurring after the time of delivery, are
transferred from the seller to the buyer.

CIF
• Cost, Insurance and Freight, named ocean port of destination.
• The seller delivers when the goods pass the ship’s rail in the port of
shipment.
• The seller must pay the costs and freight necessary to bring the goods to
the named port of destination BUT the risk of loss or damage to the goods,
as well as any additional costs due to the events occurring after the time of
delivery, are transferred from the seller to the buyer.
• Seller also has to procure marine insurance against the buyer’s risk of
loss of or damage to the goods during the carriage.
•Under the CIF term the seller is required to obtain insurance only on
minimum cover.
• Buyer to make his own extra insurance arrangements.
• This term is used for ocean shipments.

CPT
• Carriage Paid To, named place or port of destination. This term is used
for air or ocean consignments.
•The seller delivers the goods to the carrier nominated by him but the
seller must in addition pay the cost of carriage necessary to bring the
goods to the named destination.
• This means that the buyer bears all risks and any other costs occurring
after the goods have been so delivered.
CIP
• Carriage and Insurance Paid To, named place or port of destination.

• The seller delivers the goods to the carrier nominated by him but the
seller must in addition pay the cost of carriage necessary to bring the goods
to the named destination.

• The buyer bears all risks and any additional costs occurring after the
goods have been so delivered.

• The seller also has to procure insurance against the buyer’s risk of loss of
or damage to the goods during carriage.

• This term is used for air or ocean consignments.

Arrival At Stated Destination
DAF
• Delivered At Frontier, named place of destination, by land, not
unloaded.

• The seller delivers when the goods are placed at the disposal of the
buyer on the means of transport not unloaded, cleared for export, but
not cleared for import at the named point and place at the frontier, but
before the customs border of the adjoining country.

• The term “frontier” may be used for any frontier including that of the
country of export.

• This term is used for any mode of transportation but delivered by land.
DES
• Delivered Ex-Ship, named port of destination, not unloaded.
• The seller delivers when the goods are placed at the disposal of the buyer
on board the ship not cleared for import at the named port of destination.
• The seller has to bear all the costs and risks involved in bringing the
goods to the named port of destination before discharging.
• This term is used for ocean shipments only.

DEQ
• Delivered Ex-Quay, named port of destination, unloaded, not cleared.
• The seller delivers when the goods are placed at the disposal of the buyer
not cleared for import on the quay (wharf) at the named port of
destination.
• The seller has to bear costs and risks involved in bringing the goods to the
named port of destination and discharging the goods on the quay (wharf).
• The DEQ term requires the buyer to clear the goods for import and to pay
for all formalities, duties, taxes and other charges upon import.
• This term is used for ocean shipments only.
DDU
• Delivered Duty Unpaid, named place of destination, not unloaded, not
cleared.

• Duty has to be borne by the buyer as well as any costs and risks caused
by his failure to clear the goods for import in time.

• This term is used for any mode of transportation.

DDP - Delivered Duty Paid, named place of destination, not unloaded,

cleared. This term is used for any mode of transportation.
 EXW FCA FAS FOB

Free Onboard
SERVICES Ex Works Free Carrier Free Alongside Ship Vessel

Warehouse Storage Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller

Loading Charges Buyer Seller Seller Seller

Buyer/

Inland Freight Buyer Seller* Seller Seller

Terminal Charges Buyer Buyer Seller Seller

Forwarder's Fees Buyer Buyer Buyer Buyer

Loading On Vessel Buyer Buyer Buyer Seller

Ocean/Air Freight Buyer Buyer Buyer Buyer

Charges On Arrival At Destination Buyer Buyer Buyer Buyer

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer

Delivery To Destination Buyer Buyer Buyer Buyer

 CFR CIF CPT CIP

Cost Insurance & Carriage Insurance

SERVICES Cost & Freight Freight Carriage Paid To Paid To

Warehouse Storage Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller

Forwarder's Fees Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller

Charges On Arrival At Destination Buyer Buyer Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer

Delivery To Destination Buyer Buyer Buyer Buyer

 DAF DES DEQ DDU DDP

Delivered At Delivered Ex Quay Delivered Duty Delivered Duty

SERVICES Frontier Delivered Ex Ship Duty Unpaid Unpaid Paid

Warehouse Storage Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller Seller

Forwarder's Fees Seller Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller Seller

Charges On Arrival At Destination Buyer Buyer Seller Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer Seller

Delivery To Destination Buyer Buyer Buyer Seller Seller

Thanking You
Open for Discussion…