Incoterms:

To facilitate commerce around the world, the International

Chamber of Commerce (ICC) publishes a set of Incoterms, officially known as international
commercial terms. Globally recognized, Incoterms prevent confusion in foreign trade
contracts by clarifying the obligations of buyers and sellers.

Understanding Incoterms:
The International Chamber of Commerce (ICC) developed
Incoterms in 1936 and updates them periodically to conform to changing trade practices. The
ICC’s mission is to promote open markets and ensure global economic prosperity through
trade.

Incoterms Rules for Any Mode of Transport:

Some common examples of
Incoterms rules for any mode of transportation include Delivered Duty Paid (DDP),
Delivered at Place (DAP), and Ex Works (EXW). The seven Incoterms for any mode of
transport are:
 EXW: Ex Works
 FCA: Free Carrier
 CPT: Carriage Paid to
 CIP: Carriage and Insurance Paid to
 DAP: Delivered at Place
 DPU: Delivered at Place Unloaded
 DDP: Delivered Duty Paid

DPU, for example, indicates the seller delivers the goods to a terminal and assumes all the
risk and transportation costs until the goods have arrived and been unloaded. After that, the
buyer assumes the risk and transportation costs of the goods from the terminal to the final
destination.

DDP indicates the seller assumes all the risk and transportation costs. The seller must also
clear the goods for export at the shipping port and for import at the destination. Moreover, the
seller must pay export and import duties for goods shipped under DDP.

Under Incoterm Ex Works (EXW), the seller is only required to make the goods available for
pickup at the seller’s business location or another specified location. Under EXW, the buyer
assumes all the risk and transportation costs.

In 2010, the two main categories of Incoterms were updated and classified by modes of
transport. The first classification applies to any mode of transport, while the second
classification only applies to sea and inland waterway transport.

Incoterms Rules for Sea and Inland Waterway Transport:

The ICC has specific Incoterms rules for inland waterway and sea transport, such as Cost,
Insurance, and Freight (CIF) and Free on Board (FOB). The Incoterms for sea and inland
waterway transport are:
  FAS: Free Alongside Ship
 FOB: Free on Board
 CFR: Cost and Freight
 CIF: Cost, Insurance, and Freight.

Free Alongside Ship (FAS):

Free alongside ship (FAS) is a contractual term used in the
international export business that stipulates that the seller must arrange for goods to be
delivered to a designated port and next to a specific vessel for easier transfer.
Free alongside ship is one of a number of internationally recognized commercial terms used
by export and import businesses.

Free on Board (FOB):

Free on Board (FOB) is a shipment term that defines the point in
the supply chain when a buyer or seller becomes liable for the goods being transported.
Purchase orders between buyers and sellers specify the FOB terms and help determine
ownership, risk, and transportation costs.

"FOB Origin" or FOB Shipping Point" means the buyer accepts the title of the goods at the
shipment point and assumes all risk once the seller ships the product. The buyer is
responsible if the goods are damaged or lost while in transit.

"FOB Destination" means the seller retains the title of the goods and all responsibility during
transit until the items reach the buyer.

Cost and Freight (CFR):

Cost and freight (CFR) is a legal term used in foreign trade
contracts. In a contract specifying that a sale is cost and freight, the seller is required to
arrange for the carriage of goods by sea to a port of destination and provide the buyer with
the documents necessary to obtain them from the carrier.

With a cost and freight sale, the seller is not responsible for procuring marine insurance
against the risk of loss or damage to the cargo during transit. Cost and freight is a term used
strictly for cargo transported by sea or inland waterways.

Cost and freight used to be abbreviated as C&F. Then, in 1990, it was changed to CFR
by Incoterms, a set of commercial trade rules established by the International Chamber of
Commerce (ICC), after users complained of difficulties adding the ampersand symbol in
telex messages and other technology used in the 1970s and 1980s.

Cost, Insurance, and Freight (CIF):

Cost, insurance, and freight (CIF) is an
international shipping agreement, which represents the charges paid by a seller to cover the
costs, insurance, and freight of a buyer's order while the cargo is in transit. Cost, insurance,
and freight only applies to goods transported via a waterway, sea, or ocean.

The goods are exported to the buyer's port named in the sales contract. Once the goods are
loaded onto the vessel, the risk of loss or damage is transferred from the seller to the buyer.
However, insuring the cargo and paying for freight remains the seller's responsibility.
CIF is similar to carriage and insurance paid to (CIP), but CIF is used for only sea and
waterway shipments, while CIP can be used for any mode of transport, such as by truck.

Handling instructions
“Handling marks” help to ensure that greater care is taken with cargo handling. It must be
possible to tell,

whether the package is sensitive to heat or moisture

whether it is at risk of breakage
where the top and bottom are and where the centre of gravity is located
where loading tackle may be slung

The symbols for package handling instructions are internationally standardized in ISO R/780
(International Organization for Standardization) and in DIN 55 402 (DIN, German Institute
for Standardization). The symbols must never be omitted as they are self-explanatory and so
overcome language problems in international transport operations.

Designation Symbol Explanation

The symbol should be applied to easily broken cargoes.

Fragile, Handle
Cargoes marked with this symbol should be handled
with care
carefully and should never be tipped over or slung.

Any other kind of point load should also be avoided

with cargoes marked with this symbol. The symbol does
Use no hooks
not automatically prohibit the use of the plate hooks
used for handling bagged cargo.

The package must always be transported, handled and

stored in such a way that the arrows always point
Top upwards. Rolling, swinging, severe tipping or tumbling
or other such handling must be avoided. The cargo need
not, however, be stored „on top“.

Compliance with the symbol is best achieved if the

cargo is kept under the coolest possible conditions. In
Keep away
any event, it must be kept away from additional sources
from heat (solar
of heat. It may be appropriate to enquire whether
radiation)
prevailing or anticipated temperatures may be harmful.
This label should also be used for goods, such as butter
 and chocolate, which anybody knows should not be
exposed to heat, in order to prevent losses.

Protect from
heat and Stowage as for the preceding symbol. The cargo must
radioactive additionally be protected from radioactivity.
sources

The symbol indicates merely where the cargo should be

slung, but not the method of lifting. If the symbols are
applied equidistant from the middle or centre of gravity,
Sling here
the package will hang level if the slings are of identical
length. If this is not the case, the slinging equipment
must be shortened on one side.

Cargoes bearing this symbol must be protected from

excessive humidity and must accordingly be stored
Keep dry under cover. If particularly large or bulky packages
cannot be stored in warehouses or sheds, they must be
carefully covered with tarpaulins.

This symbol is intended to provide a clear indication of

the position of the centre of gravity. To be meaningful,
Centre of this symbol should only be used where the centre of
gravity gravity is not central. The meaning is unambiguous if
the symbol is applied onto two upright surfaces at right
angles to each other.

No hand truck The absence of this symbol on packages amounts to

here permission to use a hand truck on them.

The maximum stacking load must be stated as „… kg

Stacking max. “. Since such marking is sensible only on packages
limitation with little loading capacity, cargo bearing this symbol
should be stowed in the uppermost layer.

Stating that the package may be clamped at the indicated

Clamp here point is logically equivalent to a prohibition of clamping
anywhere else.
 According to regulations, the symbol should either be
provided with the suffix „…°C“for a specific
temperature or, in the case of a temperature range, with
Temperature
an upper („…°C max. “) and lower („…°C min. “)
limitations
temperature limit. The corresponding temperatures or
temperature limits should also be noted on the
consignment note.

This symbol should only be applied to the sides where

Do not use
the forklift truck cannot be used. Absence of the symbol
forklift truck
on other sides of the package amounts to permission to
here
use forklift trucks on these sides.

Contact with packages bearing this symbol should be

avoided at low levels of relative humidity, especially if
Electrostatic insulating footwear is being worn or the ground/floor is
sensitive device nonconductive. Low levels of relative humidity must in
particular be expected on hot, dry summer days and very
cold winter days.
A barrier layer which is (virtually) impermeable to water
vapour and contains desiccants for corrosion protection
is located beneath the outer packaging. This protection
Do not destroy will be ineffective if the barrier layer is damaged. Since
barrier the symbol has not yet been approved by the ISO,
puncturing of the outer shell must in particular be
avoided for any packages bearing the words „Packed
with desiccants“.

Tear off here This symbol is intended only for the receiver.