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Incoterms

While the terms of sale in international business often sound similar to those commonly used in domestic contracts, they often
have different meanings. Confusion over these terms can result in a lost sale or a financial loss on a sale. Thus, it is essential that
you understand what terms you are agreeing to before you finalize a contract.

Incoterms 2000
By the 1920s, international traders had developed a set of trade terms to describe their rights and obligations with regard to the
sale and transport of goods. These trade terms consisted of short abbreviations for lengthy contract provisions. Unfortunately,
there was no uniform interpretation of these terms in all countries, and therefore misunderstandings often arose in cross-border
transactions.
To improve this aspect of international trade, the International Chamber of Commerce (ICC) in Paris developed INCOTERMS
(INternational COmmercial TERMS), a set of uniform rules for the interpretation of international commercial terms defining the
costs, risks, and obligations of buyers and sellers regarding the delivery of goods sold in international transactions. First published
in 1936, these rules have been periodically revised to account for changing modes of transport and document delivery. The current
version is Incoterms 2000.

Use of Incoterms
Incoterms are not implied into contracts for the sale of goods. If you desire to use Incoterms, you must specifically include them in
your contract. Further, your contract should expressly refer to the rules of interpretation as defined in the latest revision of
Incoterms, for example, Incoterms 2000, and you should ensure the proper application of the terms by additional contract
provisions. Also, Incoterms are not "laws." In case of a dispute, courts and arbitrators will look at: 1) the sales contract, 2) who
has possession of the goods, and 3) what payment, if any, has been made. See International Contracts, also by World Trade Press.

Illustrated Guide to Incoterms
This guide was designed to give a graphic representation of the buyer's and seller's risks and costs under each Incoterm. The
material on each facing page gives a summary of seller and buyer responsibilities.

Incoterms Do . . .
Incoterms 2000 may be included in a sales contract if the parties desire the following:
1.
2.

3.

To complete a sale of goods.
To indicate each contracting party's costs, risks, and obligations with regard to delivery of the goods as follows:
a. When is the delivery completed?
b. How does a party ensure that the other party has met that standard of performance?
c. Which party must comply with requisite licenses and government-imposed import and export formalities?
d. What are the mode and terms of carriage?
e. What are the delivery terms and what is required as proof of delivery?
f. When is the risk of loss transferred from the seller to the buyer?
g. How will transport costs be divided between the parties?
h. What notices are the parties required to give to each other regarding the transport and transfer of the goods?
To establish basic terms of transport and delivery in a short format.

Incoterms Do Not . . .
Incoterms 2000 are not sufficient on their own to express the full intent of the parties. They do not:
1.
2.
3.
4.
5.
6.

Apply to contracts for services.
Define contractual rights and obligations other than for delivery.
Specify details of the transfer, transport, and delivery of the goods.
Determine how title to the goods will be transferred.
Protect a party from his/her own risk of loss.
Define the remedies for breach of contract.

Tip: Incoterms can be quite useful, but their use has limitations. If you use them incorrectly, your contract may be ambiguous, if
not impossible to perform. It is therefore important to understand the scope and purpose of Incoterms- when and why you might
use them-before you rely on them to define such important terms as mode of delivery, customs clearance, passage of title, and
transfer of risk. Back to top

Organization of Incoterms
Incoterms are grouped into four categories:
1.
2.
3.
4.

The "E" term (EXW)-The only term where the seller/exporter makes the goods available at his or her own premises to the
buyer/importer.
The "F" terms (FCA, FAS and FOB)-Terms where the seller/exporter is responsible to deliver the goods to a carrier named
by the buyer.
The "C" terms (CFR, CIF, CPT and CIP)-Terms where the seller/exporter is responsible for contracting and paying for
carriage of the goods, but not responsible for additional costs or risk of loss or damage to the goods once they have been
delivered to the carrier. C terms evidence "shipment" (as opposed to "arrival") contracts.
The "D" terms (DAF, DES, DEQ, DDU and DDP)-Terms where the seller/exporter is responsible for all costs and risks
associated with bringing the goods to the named place (usually of destination). D terms evidence "arrival" contracts.

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Mode of transport
Not all Incoterms are appropriate for all modes of transport. Some terms were designed with waterborne transport (sea, ocean,
and inland waterway) in mind while others were designed to be applicable to all modes. The following table sets out which terms
are applicable for each mode of transport.

Helpful Definitions
Pre-carriage-The initial transport of goods from the seller's premises to the main port or place of shipment. Usually by truck, rail or
on inland waterway.
Main carriage-The primary transport of goods, generally for the longest part of the journey and generally from one country to
another. Usually by sea vessel or by airplane, but can be by truck or rail or inland waterway as well.
On-carriage-Transport from the port or place of arrival in the country of destination to the buyer's premises. Usually by truck, rail
or inland waterway.
Multimodal-A single shipment of goods using at least two modes of transport, such as shipping by rail and by sea. Back to top

Notes on Incoterms
1.
2.
3.
4.
5.
6.

7.

8.

Underlying Contract-Incoterms were designed to be used within the context of a written contract for the sale of goods
(not services). Incoterms, therefore, refer to the contract of sale, rather than the contract of carriage of the goods. Buyers
and sellers should specify that their contract be governed by Incoterms 2000.
EXW and FCA-If you buy on Ex Works (EXW) or Free Carrier (FCA) terms you will need to arrange for the contract of
carriage. Also, since the shipper will not receive a bill of lading, using a letter of credit requiring a bill of lading will not be
possible.
EDI: Electronic Data Interchange-It is increasingly common for sellers to prepare and transmit documents electronically.
Incoterms provide for EDI so long as buyers and sellers agree on their use in the sales contract.
Insurable Interest-Note that in most cases neither the buyer or the seller is obligated to provide insurance. In fact, only
two Incoterms mention insurance: CIP and CIF. The seller and buyer, however, may have insurable interest in the goods,
and prudence may dictate purchase of insurance coverage.
Customs of the Port or Trade-Incoterms are an attempt to standardize trade terms for all nations and all trades. However,
different ports and different trades have their own customs and practices. It is best if such practices are specified in the
sales contract.
Named Port or Place-An integral component of each Incoterm is the inclusion of a "named port" or "named place" after
the Incoterm. For example, EXW (Ex Works) by itself is incomplete. The Incoterm must be followed by a specific named
port or named place (depending upon the Incoterm). With EXW it is a "named place." The complete term might be "EXW
Seller's Factory Petaluma, California USA."
Precise Point of Delivery-In addition to a specific "named port" or "named place," it may be necessary to name a precise
point of delivery. For example, the original terms of sale may state "CFR Port of Rotterdam." The Port of Rotterdam,
however, is huge and the buyer may find that a particular point within the port is best and should so state in the sales
contract and in the trade term. This may be an important issue in situations where the buyer is responsible for unloading,
storage and other charges once the goods have been made available at the named place. In some cases it may not be
possible for the buyer to name the precise point of delivery at the time of contract. However, if the buyer does not do so
in a timely manner, it may give the seller the option to make delivery within a range of places that is within the terms of
the contract, but inconvenient for the buyer.
Export/Import Customs Clearance-It is usually desirable that export customs formalities be handled by the seller and
import customs formalities be handled by the buyer. However, some trade terms (such as EXW) require that the buyer
handle export formalities and others require that the seller handle import formalities. In each case the buyer and seller

9. . however. Definition of "Carrier"-A carrier is a firm that transports goods or passengers for hire. . With the FCA term. Passing of Risks and Costs-The general rule is that risks and costs pass from the seller to the buyer once the seller has delivered the goods to the port or place named in the trade term. named place) EXW. however. As a result. Variants of Incoterms (Added Wording)-Incoterms give no guidance regarding the addition of words to individual terms. Such a stipulation is a variant and must be made within the contract of sale. may present a risk. it is the responsibility of the seller to provide for safe and appropriate packaging. Packing-It is the responsibility of the seller to provide packaging unless the goods shipped are customarily shipped in bulk (commodities such as oil or grain). define (name) the carrier in the sales contract. especially when the wording contradicts the fundamental meaning of the Incoterm itself. may stipulate that the seller be responsible for the costs and risks of loading the goods onto a transport vehicle. Use additional wording only if you are certain that it is consistent with the meaning of the Incoterm used. the buyer nominates the "carrier" and the seller need only accept the nomination for the term to work. but only to the extent that the buyer has made the circumstances of the transport known to the seller beforehand. however. the seller/exporter/manufacturer merely makes the goods available to the buyer at the seller's "named place" of business. c) import inspections as required by the import authority are the responsibility of the party responsible for import formalities. . For example. 13. 12. but not for VAT (Value Added Taxes) the term "DDP VAT Unpaid" may be used. This trade term places the greatest responsibility on the buyer and minimum obligations on the seller. In practice the seller and buyer may agree to such wording. Back to top EXW Ex Works (. The seller does not clear the goods for export and does not load the goods onto a truck or other transport vehicle at the named place of departure. To do so. 10.. However. will have to assume risk from export and import restrictions and prohibitions. b) pre-shipment inspections as required by the export authority are the responsibility of the party responsible for export formalities. rather than simply arranging for such transport. In most situations it is best if the buyer and seller agree in the sales contract on the type and extent of packing required. The buyer may require such an inspection and inspection document as a condition of payment. This should be researched before accepting final terms. In some cases foreign exporters may not be able to obtain import licenses in the country of import.named place) In Ex Works. Adding wording to an Incoterm. and d) third-party inspections for independent verification of quality and quantity (if required) are generally the responsibility of the buyer.. For example: FCA Supplier's Facility Hong Kong. A better solution in this situation is to use the FCA (Free Carrier) term:. If the seller is responsible for packing goods in an ocean or air freight container it is also his or her responsibility to pack the container properly to withstand shipment. In the FCA term. if the seller agrees to DDP terms. it may not be possible to know beforehand the type or duration of transport. the carrier can be any person who by contract "undertakes to perform or procure" such services. Inspection-These are several issues related to inspections: a) the seller is responsible for costs of inspection to make certain the quantity and quality of the shipment is in conformity with the sales contract. 11. Ex Works (. agreeing to pay for customs formalities and import duties. The parties to the transaction.

Notice to Seller-If. Carriage and Insurance-The seller has no obligation to provide carriage of goods or insurance. the buyer is able to specify a time within a stipulated period. 5. Pay all costs relating to export and import including duties. customs formalities and other charges including transshipment. 8. at the named place and on the date stipulated in the sales contract. authorization or documentation required for export of the goods. It represents the cost of the goods without any other costs included. Provide the buyer at the buyer's request information necessary to obtain insurance. 6. Inspection(s)-Pay for the costs of pre-shipment inspection( s) including inspections required by the country of export. Licenses and Customs Formalities-Provide the buyer at the buyer's request. Taking Delivery-Take delivery of the goods when they have been made available by the seller in accordance with the terms of the sales contract. . Goods-Provide the goods. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. 7. In such a case Free Carrier (FCA) is recommended. Proof of Delivery-Provide the seller with evidence of having taken delivery. Costs-Pay all costs until the goods have been made available to the buyer in accordance with #4 above. The Ex Works term is often used when making an initial quotation for the sale of goods. Proof of Delivery. Carry out all export and import formalities at own risk and cost. 7. risk and expense. to give the seller sufficient notice. Costs-Pay all costs for carriage and insurance from the time the goods have been made available by the seller in accordance with the terms of the sales contract. Notice to the Buyer-Provide sufficient notice to the buyer of the location and time of availability of the goods. Risk Transfer-Assume all risks to the goods (loss or damage) until they have been made available to the buyer in accordance with # 4 above. 5. Examples EXW Ex Works ABC Factory Paris. taxes. assistance in securing documentation originating in the country of origin or of export as required for export and import. 2. 3. The "E" Incoterm is where the seller/exporter makes the goods available to the buyer/importer at the seller/exporter's premises/factory/ warehouse (the "named place").If the buyer cannot handle export formalities the Ex Works term should not be used. France EXW Ex Works XYZ Printing Plant Singapore Incoterm Category EXW is the only "E" Incoterm. risk and cost. 8. 3. every assistance in obtaining any license. Provide marking appropriate to the packaging. 4. according to the sales contract. 4. Pay all costs resulting from failure to take delivery at the named place and time. Carriage and Insurance-The buyer has no obligation to the seller to provide contract of carriage or insurance. Packing. 2. Licenses and Customs Formalities-Obtain at own risk and cost all export and import licenses and authorizations. Risk Transfer-Assume all risks (loss or damage) from the time the goods have been made available by the seller in accordance with the terms of the sales contract. not loaded. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Other-Provide the buyer. Payment-Pay for the goods as provided in the sales contract. 9. Modes of Transport Covered All modes of transport including multimodal. commercial invoice or electronic message. 9. Delivery-Make the goods available to the buyer. Transport Documents-The seller has no obligation to provide the buyer with a proof of delivery or a transport document. and/or specify a place of taking delivery. 10. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. and other documentation as required by the sales contract. at the buyer's request. 6. Seller's Responsibilities (summary) 1. Checking. Normal payment terms for Ex Works transactions are generally cash in advance and open account. Buyer's Responsibilities (summary) 1. Reimburse the seller for costs of providing assistance in obtaining export licenses and authorizations.

a trucking firm. named place) In Free Carrier. Note that a carrier is a firm that itself transports goods or passengers for hire. With the FCA term. the seller is responsible for loading the goods onto the transport vehicle. can act as a "carrier" under this term. the seller/exporter/manufacturer clears the goods for export and delivers them to the carrier specified by the buyer at the named place. The Free Carrier term may be used for any mode of transport. the carrier can be any person who by contract "undertakes to perform or procure" such services. If the named place is the seller's place of business. Therefore. Other-Pay and/or reimburse the seller for all costs associated with securing documentation originating in the country of origin or export as required for export and import. Examples FCA Free Carrier ABC Shipping Hamburg Germany FCA Free Carrier XYZ Air Lines SFO (San Francisco International Airport) FCA Free Carrier AZ Freight Forwarders Tokyo Japan FCA Free Carrier Supplier's Facility Bogata. the buyer names the carrier or the individual who is to receive the goods. Usual payment terms for Free Carrier transactions are cash in advance and open account. such as a freight forwarder. . If the named place is any other location. such as the loading dock of the carrier. an airline. In such a case. A carrier can be a shipping line. define (name) the carrier in the sales contract. Back to top FCA Free Carrier (. the seller is not responsible for unloading. The "named place" in Free Carrier and all "F" terms is domestic to the seller. the buyer nominates the "carrier" and the seller need only accept the nomination for the term to work. The carrier can also be an individual or firm who undertakes to procure carriage by any of the above methods of transport including multimodal. however. "Carrier" has a specific and somewhat expanded meaning. or a railway. rather than simply arranging for such transport. . In the FCA term. Colombia Incoterm Category . a person. To do so. including multimodal. The Free Carrier term is often used when making an initial quotation for the sale of goods.10.

. Proof of Delivery. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Proof of Delivery. No obligation for insurance. Other-Provide the buyer. 7. Inspection(s)-Pay for the costs of pre-shipment inspection except inspections required by the country of export. Carriage and Insurance-Provide for contract of carriage from the named place. 6. 3. Licenses and Customs Formalities-Obtain at own risk and cost all required export licenses. commercial invoice or electronic message. Carriage and Insurance-The seller has no obligation to provide carriage of goods or insurance. documentation and authorizations and carry out all export formalities and procedures. taxes and other charges including transshipment. Give the seller instructions regarding carriage. the seller must notify buyer who may chose to decline the contract and notify the seller. the seller may contract for carriage on standard industry terms at the buyer's risk and cost. Costs-Pay all costs until the goods have been delivered to the carrier at the named place as well as all costs relating to export including duties. Pay all costs resulting from failure to take delivery at the named place and time. named port of shipment) . Risk Transfer-Assume all risk of loss or damage from the time the goods have been delivered to the carrier as provided in the sales contract. assistance in securing documentation originating in the country of origin or of export as required for import or transshipment through another country. Checking. Other-Pay all costs associated with securing documentation originating in the country of origin or export as required for import. Back to top FAS Free Alongside Ship (. 10. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. if requested by buyer. Costs-Pay all costs for carriage and insurance from the time the goods have been delivered to the carrier as provided in the sales contract. Risk Transfer-Assume all risks to the goods (loss or damage) until they have been delivered to the carrier at the named place. 8. Goods-Provide the goods. Notices-Provide sufficient notice to the buyer that the goods have been delivered to the carrier. or delivers the goods to the carrier's terminal. In general. documentation and authorizations and carry out all import formalities. Delivery-Deliver the goods to the named carrier. 5. at the buyer's request. Reimburse seller for costs in providing documentation or assistance. Requirements for delivery to the carrier vary depending upon the means of transport and the size of the shipment. Transport Document-Accept the seller's proof of delivery or transport document. Transport Documents-Provide the buyer with a proof of delivery (to the carrier) or a transport document. taxes and customs formalities. Pay all costs relating to import formalities including duties. risk and expense. but does not bear risk or costs once the goods have been handed over. delivery is considered complete when the seller either loads the goods onto the vehicle provided. 2. not unloaded. Taking Delivery-Take delivery of the goods as provided in the sales contract. Packing. Seller's Responsibilities (summary) 1. Buyer's Responsibilities (summary) 1. 4. or to assist the buyer in obtaining a transport document. Notice to Seller-Give the seller sufficient notice of the name of the carrier. Provide marking appropriate to the packaging. freight forwarder or person at the named place and at the time stipulated in the sales contract. 3. 8. However. If so. Provide the buyer at the buyer's request information necessary to obtain insurance. Payment-Pay for the goods as provided in the sales contract. Licenses and Customs Formalities-Obtain all import licenses. 9. 5. 9.FCA is an "F" Incoterm where the seller/exporter delivers the goods export cleared to a carrier named by the buyer. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Modes of Transport Covered All modes of transport including multimodal. 10. . 2. 4. 7. 6. and other documentation as required by the sales contract. the time or period for delivery and the place of delivery.

grains. Costs-Pay all costs until the goods have been delivered alongside the named vessel at the port of shipment and all costs related to export formalities. The Free Alongside Ship term is used only for ocean or inland waterway transport. Risk Transfer-Assume all risks of loss or damage to the goods until they have been delivered to the port of shipment at the named place and time as provided in the sales contract. 5. 3. 6. and does not bear risk or costs once the goods have been handed over.] The parties to the transaction. may stipulate in their contract of sale that the buyer. requires that the seller clear the goods for export. Delivery-Deliver the goods on the quay alongside the named vessel at the named port of shipment and at the time stipulated in the sales contract. but letters of credit are also used. Seller's Responsibilities (summary) 1. and ore. ." [The seller's clearing the goods for export is new to Incoterms 2000.In Free Alongside Ship. commercial invoice or electronic message. Modes of Transport Covered Used only for ocean or inland waterway transport. 4. The Free Alongside Ship term is commonly used in the sale of bulk commodity cargo such as oil. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. the seller/exporter/manufacturer clears the goods for export and then places them alongside the vessel at the "named port of shipment. 2. Examples FAS Free Alongside Ship Port Elizabeth South Africa FAS Free Alongside Ship Le Havre France Incoterm Category FAS is an "F" Incoterm where the seller/exporter delivers the goods alongside a ship. however. and other documentation as required by the sales contract. instead of the seller clear the goods for export. The "named place" in Free Alongside Ship and all "F" terms is domestic to the seller. Carriage and Insurance-The seller has no obligation to the buyer to provide carriage of goods or insurance. Usual payment terms for Free Carrier transactions are cash in advance and open account. however. Goods-Provide the goods. The standard FAS term.

Reimburse seller for seller's costs in providing such documentation or assistance. or to assist the buyer in obtaining a transport document. . Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Licenses and Customs Formalities-Obtain at own risk and cost any import licenses and authorizations and carry out all import formalities. Packing. the seller/exporter/manufacturer clears the goods for export and is responsible for the costs and risks of delivering the goods past the ship's rail at the named port of shipment. Transport Documents-Provide the buyer with a proof of delivery (to the carrier) or a transport document. Inspection(s)-Pay for the costs of pre-shipment inspection except inspections required by the country of export. . 8. No obligation for insurance. 10. Proof of Delivery. 9. Buyer's Responsibilities (summary) 1. 4. The "named place" in Free On Board and all "F" terms is domestic to the seller. Back to top FOB Free On Board (. Costs-Pay all costs for carriage and insurance from the time the goods have been delivered alongside the vessel in accordance with the terms of the sales contract. Other-Provide the buyer at the buyer's request. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import and transshipment through another country. Taking Delivery-Take delivery of the goods as provided in the sales contract. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. Payment-Pay for the goods as provided in the sales contract. 6.7. 3. Proof of Delivery. Risk Transfer-Assume all risk of loss or damage from the time the goods have been delivered alongside the ship at the named port of shipment as provided in the sales contract. Provide the buyer at the buyer's request information necessary to obtain insurance. Notice to Seller-Give sufficient notice to the seller of the name of the vessel. 9. Provide marking appropriate to the packaging. Transport Document-Accept the seller's proof of delivery or transport document. 10. Other-Pay all costs associated with securing documentation originating in the country of origin or export as required for import formalities. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered alongside the named vessel at the named port of shipment. Carriage and Insurance-Provide for contract of carriage from the named port of shipment. 2. Also. Checking. Pay all costs relating import formalities including duties. the time or period for delivery and the place of delivery. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. 7. Pay all costs resulting from failure of the named ship to arrive on time or to be able to take the goods. 5. to give the seller instructions regarding contract for carriage. 8. . taxes and other charges including transshipment. named port of shipment) In Free On Board. The Free On Board term is used only for ocean or inland waterway transport.

Transport Documents-Provide the buyer with a proof of delivery or a transport document. 7. and other documentation as required by the sales contract. 5. and ore where passing the ship's rail is important. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered on board the named vessel. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import and transshipment through another country. 8. 4. 2. and letters of credit. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. but does not bear risk or costs afterwards. Costs-Pay all costs until the goods have passed the ship's rail on the named vessel as well as all costs relating to export including duties. or to assist the buyer in obtaining a transport document. export cleared. open account. on the other hand. If the seller and buyer do not intend to have the goods pass the ship's rail. The Free On Board term is very commonly misused in situationas where a shipment is simply handed over to a carrier without being loaded onboard an ocean or inland waterway vessel. 5. 2. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. 6. Costs-Pay all costs for carriage and insurance from the time the goods have passed the ship's rail at the port of shipment in accordance with the terms of the sales contract. Checking. Packing. Modes of Transport Covered Used only for ocean or inland waterway transport. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. grains. Payment-Pay for the goods as provided in the sales contract. Free On Board (FOB) does not mean loading the goods onto a truck at the seller's place of business. 6. Pay all costs resulting from failure of the named ship to arrive on time . No obligation for insurance. Risk Transfer-Assume all risks of loss or damage to the goods until they have passed the ship's rail on the named vessel as provided in the sales contract. Provide the buyer at the buyer's request information necessary to obtain insurance. Delivery-Deliver the goods on board the named vessel at the named port of shipment and at the time stipulated in the sales contract. commercial invoice or electronic message. Carriage and Insurance-Provide for contract of carriage from the named port of shipment. on board a ship. Free On Board is used only in reference to delivering the goods past a ship's rail in ocean or inland waterway transport. Seller's Responsibilities (summary) 1.Normal payment terms for FOB transactions include cash in advance. Buyer's Responsibilities (summary) 1. The key document in FOB transactions is the "On Board Bill of Lading. 3. Goods-Provide the goods. the FCA term should be used instead. Free Carrier. 3. Carriage and Insurance-The seller has no obligation to the buyer to provide carriage of goods or insurance. Examples FOB Free on Board "Vessel ABC" Buenos Aires Argentina FOB Free on Board Gdansk Poland Incoterm Category FOB is an "F" Incoterm where the seller/exporter is responsible for delivering the goods. Provide marking appropriate to the packaging. taxes and customs formalities. Proof of Delivery. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Taking Delivery-Take delivery of the goods as provided in the sales contract. Licenses and Customs Formalities-Obtain at own risk and cost any import licenses and authorizations and carry out all import formalities. 4. The Free On Board term is commonly used in the sale of bulk commodity cargo such as oil. is applicable to all modes of transport." Sellers and buyers often confuse the Free On Board term with Free Carrier. 9. Risk Transfer-Assume all risks of loss or damage from the time the goods have passed the ship's rail at the port of shipment. Other-Provide the buyer at the buyer's request. 10.

Reimburse seller for seller's costs in providing such documentation or assistance. taxes and other charges including transshipment. 9. The Cost and Freight term is commonly used the sale of a) bulk commodity cargo such as oil. However. the seller/exporter/manufacturer clears the goods for export and is responsible for delivering the goods past the ship's rail at the port of shipment (not destination). grains. Proof of Delivery. The term is sometimes used for LCL (less than container load) cargo and for the shipment of goods by rail in boxcars to the ocean carrier. 10. b) oversize and overweight cargo that will not fit into an ocean freight container. liquid chemicals. Back to top CFR Cost and Freight (. C terms evidence "shipment" (as opposed to "arrival") contracts. or c) cargo that exceeds the weight limitations of ocean containers. Other-Pay all costs associated with securing documentation originating in the country of origin or export as required for import. the buyer assumes responsibility for risk of loss or damage as well as any additional transport costs. The seller is also responsible for paying for the costs associated with transport of the goods to the named port of destination. . Pay all costs relating to import formalities including duties. The "named port of destination" in Cost and Freight and all "C" terms is domestic to the buyer. but not responsible for additional costs or risk of loss or damage to the goods once they have been delivered past the ship's rail at origin. open account. 8. and ore. . Inspection(s)-Pay for the costs of pre-shipment inspection except inspections required by the country of export. and letters of credit. The Cost and Freight term is used only for ocean or inland waterway transport.or to be able to take the goods. . Notice to Seller-Give sufficient notice to the seller of the name of the vessel. Transport Document-Accept the seller's proof of delivery or transport document. once the goods pass the ship's rail at the port of shipment. the time or period for delivery and the place of delivery. Examples CFR Cost and Freight Port-au-Prince Haiti CFR Cost and Freight Bombay India Incoterm Category CFR is a "C" Incoterm where the seller is responsible for contracting and paying for carriage of the goods. named port of destination) In Cost and Freight. Normal payment terms for Cost and Freight transactions include cash in advance. 7.

Packing. Inspection(s)-Pay for the costs of pre-shipment inspection except inspections required by the country of export. taxes and other charges including transshipment. Pay all costs relating to import formalities including duties. the buyer is able to specify a time for shipping and/or specify a port of destination. Other-Provide the buyer at the buyer's request. 10. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. Proof of Delivery. Also to pay all costs relating to export including duties. Transport Documents-Provide the buyer with a transport document that will allow the buyer to claim the goods at the destination and (unless otherwise agreed) allow the buyer to sell the goods while in transit through the transfer of the transport document or by notification to the sea carrier. Risk Transfer-Assume all risk of loss or damage from the time the goods have passed over the ship's rail at the port of shipment. Other-Pay all costs of securing documentation from the country of origin or export as required for import. Carriage and Insurance-Contract for and pay all costs of carriage by sea vessel to the named port of destination. Risk Transfer-Assume all risks of loss or damage to the goods until they have passed over the ship's rail at the port of shipment. 8. 5. Costs-Pay all costs until the goods have been delivered to the named port of shipment and passed over the ship's rail plus costs of loading. Back to top CIF Cost. 3. 8. 6. carriage to the port of destination and normal unloading. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Notice to Seller-If. including unloading. Goods-Provide the goods. 7. Provide marking appropriate to the packaging. Reimburse seller for costs in providing such documentation or assistance.. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered on board the named vessel. Costs-Pay all additional costs for the goods once they have passed over the ship's rail at the port of shipment. to give the seller sufficient notice. Taking Delivery-Accept delivery of the goods at the port of origin as provided in the sales contract. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import and transshipment (as necessary). 5. 4. 2.. 6. 10. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. Delivery-Deliver the goods on board the named vessel at the named port and on the date or within the time period stipulated in the sales contract. Checking. taxes and customs formalities. 3. named port of destination) . Seller's Responsibilities (summary) 1. Payment-Pay for the goods as provided in the sales contract.Modes of Transport Covered Used only for ocean or inland waterway transport. Buyer's Responsibilities (summary) 1. 9. 2. Any date used with the CFR term should be associated with the date of delivery past the ship's rail at the port of origin. according to the sales contract. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. 4. lighterage and wharfage at the port of destination. No obligation to provide insurance. and other documentation as required by the sales contract. Proof of Delivery. Insurance and Freight (. Provide the buyer at the buyer's request information necessary to obtain insurance. 7. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. commercial invoice or electronic message. Carriage and Insurance-No obligation to the buyer. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. 9.

Examples CIF Cost. liquid chemicals. commercial invoice or electronic message. . C terms evidence "shipment" (as opposed to "arrival") contracts. The seller is responsible for paying for the costs associated with transport of the goods to the named port of destination. The insurance policy must allow the buyer to make claim directly from the insurer. and letters of credit. Insurance and Freight. The seller is also responsible for procuring and paying for minimum cover marine insurance on behalf of the buyer against the buyer's risk of loss for the shipment. 3. The Cost. grains. Insurance and Freight and all "C" terms is domestic to the buyer. However. and ore.In Cost. and other documentation as required by the sales contract. Modes of Transport Covered Used only for ocean or inland waterway transport. Insurance and Freight term is used only for ocean or inland waterway transport. Insurance and Freight Port of New York Incoterm Category CIF is a "C" Incoterm where the seller is responsible for contracting and paying for carriage and minimum cover insurance of the goods. the buyer assumes responsibility for risk of loss or damage as well as any additional transport costs. Carriage and Insurance-Contract for and pay costs of carriage by sea or inland waterway and minimum cover insurance for 110 percent of the value of the contract to the named port of destination. Normal payment terms for Cost. Insurance and Freight Hong Kong CIF Cost. Seller's Responsibilities (summary) 1. The "named port of destination" in Cost. 2. once the goods pass the ship's rail at the port of shipment. Insurance and Freight transactions include cash in advance. open account. Deliver the insurance document to the buyer. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. but not responsible for additional costs or risk of loss or damage to the goods once they have been shipped. The Cost and Freight term is commonly used the sale of bulk commodity cargo such as oil. the seller/exporter/manufacturer clears the goods for export and is responsible for delivering the goods past the ship's rail at the port of shipment (not destination). Goods-Provide the goods.

Other-Pay costs of securing documentation from the country of origin or export as required for import. 6. Back to top CPT Carriage Paid To (. carriage to the port of destination and normal unloading. according to the sales contract. Payment-Pay for the goods as provided in the sales contract. plus costs of loading. Proof of Delivery. 9. Proof of Delivery. Packing. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. Delivery-Deliver the goods past the ship's rail aboard the named vessel at the named port and at the date or within the time period stipulated in the sales contract. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. Also to pay all costs relating to export including duties. Transport Documents-Provide the buyer with a transport document that will allow the buyer to claim the goods at the destination and (unless otherwise agreed) allow the buyer to sell the goods while in transit through the transfer of the transport document or by notification to the sea carrier. 6. Costs-Pay all supplemental costs for the goods once they have passed over the ship's rail at the port of shipment. Reimburse seller such costs. 9. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. 5. 4. Pay all costs relating to import formalities including duties. 7. Costs-Pay all costs of carriage and insurance until the goods have been delivered to the named port of shipment and passed over the ship's rail. risk and cost any and all assistance in securing documentation originating in the country of export or of origin required for import and for transshipment. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered on board the named vessel. . Any date used with the CIF term should be associated with the date of delivery past the ship's rail at the port of origin. taxes and other charges including transshipment. . Provide information necessary to obtain insurance. lighterage and wharfage at the port of destination. 5. 10. Other-Provide the buyer at the buyer's request. to give the seller sufficient notice.4. the buyer is able to specify a time for shipping and/or specify a port of destination. 8. including unloading. Taking Delivery-Accept delivery of the goods at the port of origin as provided in the sales contract. 2. Risk Transfer-Assume all risk of loss or damage from the time the goods have passed over the ship's rail at the port of shipment. 10. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Inspection(s)-Pay for the costs of pre-shipment inspection except inspections required by the country of export. 8. taxes and customs formalities. Provide marking appropriate to the packaging. Buyer's Responsibilities (summary) 1. Carriage and Insurance-No obligation for carriage or insurance. named place of destination) . 7. Checking. unless otherwise specified in the sales contract. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. 3. Notice to Seller-If. Risk Transfer-Assume all risks of loss or damage to the goods until they have passed over the ship's rail at the port of shipment.

and is responsible for paying for carriage to the named place of destination. Checking. the risk passes when the goods have been delivered to the first carrier. containerized ocean freight. Costs-Pay all costs until the goods have been delivered to the carrier plus costs of loading. but not responsible for additional costs or risk of loss or damage to the goods once they have been shipped. The seller is not responsible for procuring and paying for insurance cover. Packing. The Carriage Paid To term is often used in sales where the shipment is by air freight. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. carriage to the place of destination and normal unloading. airline. and other documentation as required by the sales contract. delivers them to the carrier. such as a freight forwarder. and other costs if such costs are included in the cost of carriage such as in small package courier delivery. If subsequent carriers are used for the carriage to the agreed destination. Pay the costs of unloading. Transport Documents-Provide the buyer with a transport document.In Carriage Paid To. but is not necessarily the final delivery point. No obligation to provide insurance. 6. commercial invoice or electronic message. Provide marking appropriate to the packaging. customs clearance. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Delivery-Deliver the goods to the carrier (or first of multiple carriers) for carriage to the named place of destination within the time period stipulated in the sales contract. the buyer becomes responsible for all additional costs. . In Incoterms 2000 the seller is also responsible for the costs of unloading. Seller's Responsibilities (summary) 1. a person. Payment-Pay for the goods as provided in the sales contract. roll-off) shipments of motor vehicles. However. 10. courier shipments of small parcels. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. 8. can act as a "carrier" under this term. 7. 9. C terms evidence "shipment" (as opposed to "arrival") contracts. Carriage and Insurance-Contract for and pay all costs of carriage to the agreed point at the named place of destination. 5. railway or also an individual or firm who undertakes to procure carriage by any of the above methods of transport including multimodal. and in "ro-ro" (roll-on. duties. Proof of Delivery. Buyer's Responsibilities (summary) 1. Modes of Transport Covered All modes of transport including multimodal. once the seller delivers the goods to the first carrier (if more than one carrier is used). customs clearance. The CPT term is valid for any form of transport including multimodal. trucking firm. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. and other costs if such costs are included in the cost of carriage. The "named place of destination" in CPT and all "C" terms is domestic to the buyer. duties. 3. 2. Risk Transfer-Assume all risks of loss or damage to the goods until they have been delivered to the carrier or first of multiple carriers. 4. Examples CPT Customer's Site Madrid Spain CPT Frankfurt Airport Frankfurt Germany Incoterm Category CPT is a "C" Incoterm where the seller is responsible for contracting and paying for carriage of the goods. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered to the carrier. Goods-Provide the goods. Therefore. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import and for transshipment (as necessary). Also to pay all costs related to export including duties. Provide the buyer at the buyer's request information necessary to obtain insurance. A "carrier" can be a shipping line. Other-Provide the buyer at the buyer's request. the seller/exporter/manufacturer clears the goods for export. taxes and customs formalities.

Examples . Reimburse seller for costs in providing such documentation or assistance. 6. Costs-Pay all additional costs (not covered in the seller's contract of carriage in Seller's #6) for the goods once they have been delivered to the carrier. the risk passes when the goods have been delivered to the first carrier. 3. 10. A "carrier" can be a shipping line. The seller is responsible for procuring and paying for minimum insurance cover. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. to give the seller sufficient notice. Therefore. Notice to Seller-If. according to the sales contract. . 5. The CIP term is valid for any form of transport including multimodal. including unloading. . such as a freight forwarder. duties. airline. 9. customs clearance. Proof of Delivery. Other-Pay all costs associated with securing documentation from the country of origin or export as required for import. Risk Transfer-Assume all risk of loss or damage from the time the goods have been delivered to the carrier by the seller. the buyer is able to specify a time for shipping and/or specify a place of destination. delivers them to the carrier. The Carriage and Insurance Paid To term is often used in sales where the shipment is by air freight. However. and is responsible for paying for carriage and insurance to the named place of destination. The "named place of destination" in CIP and all "C" terms is domestic to the buyer. containerized ocean freight. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. but is not necessarily the final delivery point. Any date used with the CPT term should be associated with the date of delivery past the ship's rail at the port of origin. Carriage and Insurance-No obligation for either carriage or insurance. 4. a person. once the goods are delivered to the carrier. 8. and in "ro-ro" (roll-on. Taking Delivery-Take delivery of the goods from the carrier at the place of origin as provided in the sales contract. and other costs if such costs are included in the cost of carriage such as in small package courier delivery.2. 7. railway or also an individual or firm who undertakes to procure carriage by any of the above methods of transport including multimodal. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. can act as a "carrier" under this term. Pay all costs relating to import formalities including duties. taxes and other charges including transshipment. courier shipments of small parcels. named place of destination) In Carriage and Insurance Paid To. the seller/exporter clears the goods for export. In Incoterms 2000 the seller is also responsible for the costs of unloading. If subsequent carriers are used for the carriage to the agreed destination. lighterage and wharfage at the place of destination. the buyer is responsible for all additional costs. roll-off) shipments of motor vehicles. trucking firm. Back to top CIP Carriage and Insurance Paid To (.

commercial invoice or electronic message. 5. 8. 9. Notice to Seller-If. and other costs if such costs are included in the contract of carriage. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. . customs clearance. 5. Any date used with the CIP term should be associated with the date of delivery past the ship's rail at the port of origin. Provide marking appropriate to the packaging. Other-Pay all costs associated with securing documentation from the country of origin or export required for import. Costs-Pay all costs until the goods have been delivered to the carrier. Seller's Responsibilities (summary) 1. C terms evidence "shipment" (as opposed to "arrival") contracts. Modes of Transport Covered All modes of transport including multimodal. insurance to the named place of destination plus normal unloading. Checking. Notice to the Buyer-Provide sufficient notice to the buyer that the goods have been delivered to the carrier. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. Proof of Delivery. 2. Taking Delivery-Take delivery of the goods from the carrier at the place of origin as provided in the sales contract. named place) . taxes and other charges including transshipment. Carriage and Insurance-Contract for and pay all costs of carriage and minimum insurance to the named place of destination. Deliver the insurance document to the buyer. but not responsible for additional costs or risk of loss or damage to the goods once they have been shipped. Other-Provide the buyer at the buyer's request. The insurance policy or document must allow the buyer to make a claim directly from the insurer. Provide the buyer with information necessary to procure additional insurance. plus costs of loading. duties. 7. Packing. Pay the costs of unloading. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import and for transshipment (as necessary). to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract.CIP XYZ Public Warehouse Jakarta Indonesia CIP LeHarve France Incoterm Category CIP is a "C" Incoterm where the seller is responsible for contracting and paying for carriage and insurance of the goods. Risk Transfer-Assume all risks of loss or damage to the goods until they have been delivered to the carrier or first of multiple carriers. 3. Reimburse seller for costs in providing such documentation or assistance. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. 7. 4. Delivery-Deliver the goods to the carrier (or first of multiple carriers) for carriage to the named place of destination within the time period stipulated in the sales contract. Goods-Provide the goods. Payment-Pay for the goods as provided in the sales contract. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. taxes and customs formalities. Carriage and Insurance-No obligation for either carriage or insurance. and other documentation as required by the sales contract. . to give the seller sufficient notice. Proof of Delivery. Pay all costs relating to import formalities including duties. lighterage and wharfage at the place of destination. Risk Transfer-Assume all risk of loss or damage from the time the goods have been delivered to the carrier by the seller. Back to top DAF Delivered At Frontier (. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. 9. 8. 2. including unloading. Also to pay all costs relating to export including duties. Buyer's Responsibilities (summary) 1. Transport Documents-Provide the buyer with a transport document. 10. 6. the buyer is able to specify a time for shipping and/or specify a place of destination. according to the sales contract. carriage. 10. Costs-Pay all additional costs (not covered in the seller's contract of carriage in Seller's #6) for the goods once they have been delivered to the carrier. 6. 4. 3.

by ship to Le Havre. . Seller is in Dallas. Risk Transfer-Assume all risks of loss or damage to the goods until they have been made available to the buyer at the named point place and time at the frontier. and not cleared for import. The shipment travels by truck from Dallas to Port Arthur. Licenses and Customs Formalities-a) Obtain at own risk and cost any export licenses and authorizations required to enable the buyer to deal with export formalities at the named frontier. Texas USA where the buyer takes possession and trucks the goods to Mexico City. Naming the precise place and time of availability at the frontier is very important as the buyer must make arrangements to unload and secure the goods in a timely manner. 2. not unloaded. No obligation to provide insurance. b) Carry out all export formalities and procedures required to bring the goods to the named frontier. And.In Delivered At Frontier. France and then by rail to the frontier in Basel where the buyer takes possession and transports the goods to the city of Bern. so long as the final shipment to the named place at the frontier is by land. Seller's Responsibilities (summary) 1. and other documentation as required by the sales contract. if transshipped. commercial invoice or electronic message. Goods-Provide the goods. 5. Modes of Transport Covered Used for all modes of transport so long as the final shipment to the named place at the frontier is by land. For example the Port of Rotterdam is so large that the buyer will wish to specify a precise place within the port. Example 1 DAF Laredo. Incoterm Category DAF is a "D" Incoterm where the seller is responsible for all costs associated with delivering the goods to the named point and place of destination. buyer is in Mexico City. Delivery-Make the goods available to the buyer unloaded at the frontier at the named point and place and on the date or period specified in the sales contract. The seller is not responsible for procuring and paying for insurance cover. Example 2 DAF Basel Switzerland. Texas. Frontier can mean any frontier including the frontier of export. 4. the seller/exporter/manufacturer clears the goods for export and is responsible for making them available to the buyer at the named point and place at the frontier. Mexico. 3. The DAF term is valid for any mode of shipment. The shipment travels by truck from Dallas to the frontier at Laredo. buyer is in Bern Switzerland. Texas. Carriage and Insurance-Contract for and pay all costs of carriage and transshipment (if necessary) to the named place. "D" terms evidence "arrival" (as opposed to "shipment") contracts. Seller is in Dallas. Texas.

7. At the buyer's request. 8. Other-Provide the buyer at the buyer's request. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. Risk Transfer-Assume all risk of loss or damage from the time the goods have been delivered at the named point. 10. place and time at the frontier. to give the seller sufficient notice. Checking. Carriage and Insurance-No obligation for either carriage or insurance. 2. named port of destination) In Delivered Ex Ship. 9. Transport Documents-Provide the buyer with documentary evidence of delivery at the frontier. and all prior to delivery export formalities. 7. Costs-Pay all costs for the goods once they have been delivered to the frontier including unloading. Provide the buyer with information necessary to obtain insurance. Provide the seller with any authorizations. according to the sales contract. provide a through document of transport to the named place of destination. 5. including carriage. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. The seller is thus responsible for all costs of getting the goods to the named port of destination prior to unloading. Back to top DES Delivered Ex Ship (. Pay for transport from the frontier to the final destination. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import. risk and cost. 3. Payment-Pay for the goods as provided in the sales contract. All forms of payment are used in DES transactions.6. The DES term is used only for shipments of goods by ocean or inland waterway or by multimodal transport where the final delivery is made on a vessel at the named port of destination. Provide marking appropriate to the packaging. permits. 6. 9. Reimburse seller for costs in providing such documentation or assistance. Notice to the Buyer-Provide sufficient notice of dispatch and projected arrival that the buyer can take appropriate action to arrange pick-up of the goods. . Buyer's Responsibilities (summary) 1. taxes and formalities. Packing. Costs-Pay all costs until the goods have been delivered at the frontier. not cleared for import. Pay all costs relating to import formalities including duties. the buyer is able to specify a time for and/or a point of taking delivery in the named port of destination. . documents or other information required for obtaining a through transport document. Taking Delivery-Take delivery of the goods once they are made available at the frontier. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. Proof of Delivery. . Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. 8. 4. Notice to Seller-If. Other-Pay all costs associated with securing documentation from the country of origin or export required for import. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. the seller/exporter/manufacturer clears the goods for export and is responsible for making them available to the buyer on board the ship at the named port of destination. 10. Proof of Delivery.

named port of destination) . 9. 10. Taking Delivery-Take delivery of the goods once they are made available at the port. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. No obligation to provide insurance. "D" terms evidence "arrival" (as opposed to "shipment") contracts. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Provide the buyer with information necessary to obtain insurance. Back to top DEQ Delivered Ex Quay (. the buyer is able to specify a time for and/or a point of taking delivery in the named port of destination. 7. 5. 3. 3. 9. Carriage and Insurance-No obligation for either carriage or insurance. 6. to give the seller sufficient notice. 6. Carriage and Insurance-Contract for and pay all costs of carriage and transshipment (if necessary) to the named place and port of destination. Other-Pay all costs associated with securing documentation from the country of origin or export required for import. Seller's Responsibilities (summary) 1. Provide marking appropriate to the packaging. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Notice to the Buyer-Provide sufficient notice of dispatch and projected arrival that the buyer can take appropriate action to arrange pick-up of the goods. Costs-Pay all costs until the goods have been delivered. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. Risk Transfer-Assume all risks of loss or damage to the goods until they have been made available to the buyer at the named place and port. 5. Risk Transfer-Assume all risk of loss or damage from the time the goods have been made available at the port. 2. Transport Documents-Provide the buyer with the delivery order and/or a transport document enabling the buyer to take delivery of the goods at the port of destination. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. . Reimburse seller for costs in providing such documentation or assistance. including those associated with transshipment to the named port of destination. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import. commercial invoice or electronic message. Goods-Provide the goods. Payment-Pay for the goods as provided in the sales contract. Checking.Examples DES Delivered Ex Ship Port of Calcutta DES Delivered Ex Ship Port of New York Incoterm Category DES is a "D" Incoterm where the seller is responsible for all costs associated with delivering the goods to the named port of destination. Proof of Delivery. 4. Modes of Transport Covered Used only for ocean or inland waterway transport. 4. Notice to Seller-If. 8. Pay all costs relating to import formalities including duties. . according to the sales contract. 7. 2. Other-Provide the buyer at the buyer's request. carriage and transshipment (if necessary) to the named port. 10. Delivery-Make the goods available to the buyer uncleared for import on board the vessel at the named port on the date or within the time period specified in the sales contract. Proof of Delivery. and other documentation as required by the sales contract. Buyer's Responsibilities (summary) 1. including all export formalities. Packing. 8. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. Costs-Pay all costs for the goods once they have been made available at the port including unloading. taxes and other charges.

therefore. 3. Goods-Provide the goods. 8. Carriage and Insurance-Contract for and pay all costs of carriage and transshipment (if necessary) to the named place. This is new for Incoterms 2000. transshipment to the named port of destination. "D" terms evidence "arrival" (as opposed to "shipment") contracts. 7. All forms of payment are used in DEQ transactions. including those associated with transshipment to the named port of destination. and other costs upon import as well as transport to the final destination. No obligation to provide insurance. commercial invoice or electronic message. Transport Documents-Provide the buyer with the delivery order and/or a transport document enabling the buyer to take possession at the port of destination. 6. . Modes of Transport Covered Used only for ocean or inland waterway transport. port and quay (wharf) of destination. Delivery-Make the goods available to the buyer at the named port and quay on the date or within the period specified in the sales contract. Examples DEQ Delivered Ex Quay Alexandria Egypt DEQ Delivered Ex Quay Stockholm Sweden Incoterm Category DEQ is a "D" Incoterm where the seller is responsible for all costs associated with delivering the goods to the quay (wharf) at the named port of destination. 4. and other documentation as required by the sales contract. Seller's Responsibilities (summary) 1. Costs-Pay all costs until the goods have been offloaded at the port of destination. duties. 2. Risk Transfer-Assume all risks of loss or damage to the goods until they have been made available to the buyer at the named port and quay (wharf). The DEQ term is used only for shipments of goods arriving at the port of destination by ocean or by inland waterway. Note: This is a reversal from earlier Incoterms where the seller was responsible for import formalities.In Delivered Ex Quay. including country of origin export formalities. the seller/exporter/manufacturer clears the goods for export and is responsible for making them available to the buyer on the quay (wharf) at the named port of destination. The buyer. assumes all responsibilities for import clearance. 5. Notice to the Buyer-Provide sufficient notice of dispatch and projected arrival that the buyer can take appropriate action to arrange pick-up of the goods. not cleared for import. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures.

Notice to Seller-If. Checking. If the buyer and seller desire that delivery should take place in the port of destination. Reimburse seller for costs in providing such documentation or assistance. taxes. However. according to the sales contract. the seller/exporter/manufacturer clears the goods for export and is responsible for making them available to the buyer at the named place of destination. if the seller and buyer desire that delivery should take place on board a sea vessel in the port of destination. Licenses and Customs Formalities-Obtain and pay costs of all import licenses and authorizations and carry out all import formalities. 9. Payment-Pay for the goods as provided in the sales contract. duties. Taking Delivery-Take delivery of the goods once they are made available at the quay. Other-Pay all costs associated with securing documentation from the country of origin or export required for import. to give the seller sufficient notice. All forms of payment are used in DDU transactions. Provide marking appropriate to the packaging. Packing. and any other costs upon import as well as transport to the final destination. Provide the buyer with information necessary to obtain insurance.9. 2. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. assumes all responsibilities for delivering the goods to the named place of destination. Other-Give the buyer. at the buyer's request. Buyer's Responsibilities (summary) 1. The seller. Risk Transfer-Assume all risk of loss or damage from the time the goods have been made available at the quay wharf). to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. risk and cost. administrative costs. therefore. but the buyer assumes all responsibility for import clearance. The DDU term can be used for any mode of transport. Transport Document-Accept the seller's delivery order or transport document so long as it is in conformity with the sales contract. 7. . Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. 8. the buyer is able to specify a time for and/or a place of delivery. 6. named place of destination) In Delivered Duty Unpaid. 10. and transshipment. Proof of Delivery. . Carriage and Insurance-No obligation for either carriage or insurance. on a quay (wharf). the DEQ term is recommended. assistance in obtaining documentation required for import clearance of the goods. 4.. duties. the DES term is recommended. Back to top DDU Delivered Duty Unpaid (. not cleared for import and not unloaded from the arriving means of transport. 10. 5. 3. . Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. Costs-Pay all costs for the goods once they have been made available at the quay (wharf). including import formalities.

Checking. 3. all export formalities. Carriage and Insurance-No obligation to for either carriage or insurance. 10. 4. Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. to give the seller sufficient notice. Seller's Responsibilities (summary) 1. Risk Transfer-Assume all risks of loss or damage to the goods until they have been made available to the buyer at the named destination. including those associated with transshipment to the named port of destination. Other-Provide the buyer at the buyer's request. 8. Provide marking appropriate to the packaging. Risk Transfer-Assume all risk of loss or damage from the time the goods have been made available at the named place of destination. the buyer is able to specify a time for and/or a place of delivery.Examples DDU Delivered Duty Unpaid New York New York USA DDU Delivered Duty Unpaid Hamburg Germany Incoterm Category DDU is a "D" Incoterm where the seller is responsible for all costs associated with delivering the goods to the named place of destination. Costs-Pay all costs for the goods once they have been made available at the named place of destination. . Delivery-Make the goods available to the buyer at the named place of destination. 6. not unloaded. and transshipment (if necessary) to the named place of destination. Notice to Seller-If. Packing. not unloaded. 8. Transport Documents-Provide the buyer with the delivery order and/or a transport document enabling the buyer to take delivery at the named place of destination. "D" terms evidence "arrival" (as opposed to "shipment") contracts. Buyer's Responsibilities (summary) 1. 10. commercial invoice or electronic message. named place of destination) . Provide the buyer with information necessary to obtain insurance. 9. Other-Pay all costs associated with securing documentation from the country of origin or export required for import. risk and expense any and all assistance in securing documentation originating in the country of export or of origin required for import. Licenses and Customs Formalities-Obtain and pay costs of all import licenses. Carriage and Insurance-Contract for and pay all costs of carriage and transshipment (if necessary) to the named place of destination. and other documentation as required by the sales contract. on the date or within the period specified in the sales contract. 5. 7. Costs-Pay all costs until the goods have been delivered to the named place of destination. taxes and other charges. 9. 2. Modes of Transport Covered All modes of transport including multimodal. including carriage. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. Taking Delivery-Take delivery of the goods once they are made available at the named place of destination. Notice to the Buyer-Provide sufficient notice of dispatch and projected arrival that the buyer can take appropriate action to arrange pick-up of the goods. 3. Proof of Delivery. Goods-Provide the goods. Pay all costs relating to import formalities including duties. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. 6. 7. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. documentation and authorizations and carry out all import formalities. Licenses and Customs Formalities-Obtain at own risk and cost any export licenses and authorizations and carry out all export formalities and procedures. according to the sales contract. Back to top DDP Delivered Duty Paid (. export duties and taxes. 4. Proof of Delivery. . Payment-Pay for the goods as provided in the sales contract. 2. Reimburse seller for costs in providing such documentation or assistance. 5. No obligation to provide insurance.

5. 4. Delivery-Make the goods available to the buyer not unloaded at the named place of destination on the date or within the period specified in the sales contract. (Note that solid line arrows above stop at buyer's loading platform. Seller's Responsibilities (summary) 1. 3. "D" terms evidence "arrival" (as opposed to "shipment") contracts. The DDP term can be used for any mode of transport. the seller/exporter/manufacturer clears the goods for export and is responsible for making them available to the buyer at the named place of destination. the place of business of the buyer's client.In Delivered Duty Paid. Examples DDP Delivered Duty Paid Chicago USA DDP Delivered Duty Paid VAT Unpaid Paris France Incoterm Category DDP is a "D" Incoterm where the seller is responsible for all costs associated with delivering the goods to the named place of destination. including all responsibility for import clearance. Goods-Provide the goods. If the parties desire that the seller NOT be obligated to pay for VAT (value-added tax). therefore. and other costs payable upon import. . assumes all responsibilities for delivering the goods to the named place of destination. No obligation to provide insurance. explicit wording to that effect should be added to the contract of sale.) The seller. or alternatively. Modes of Transport Covered All modes of transport including multimodal. cleared for import. commercial invoice or electronic message. Risk Transfer-Assume all risks of loss or damage to the goods until they have been made available to the buyer at the named place of destination. The DDP term is typically used when the named place of destination is the buyer's place of business. including those associated with transshipment to the named place of destination. Carriage and Insurance-Contract for and pay all costs of carriage and transshipment (if necessary) to the named place of destination. Licenses and Customs Formalities-Obtain at own risk and cost any export and import licenses and authorizations and carry out all export and import formalities and procedures. All forms of payment are used in DDP transactions. duties. but not unloaded from the transport vehicle. 2. and other documentation as required by the sales contract.

Provide appropriate packing (unless the goods are traditionally delivered unpackaged) as required for the transport of the goods. Proof of Delivery. all export and import formalities and transshipment (if necessary) to the named destination. Taking Delivery-Take delivery of the goods once they are made available at the named place of destination. risk and cost any and all assistance in securing import and other documentation necessary for the seller to make the goods available to buyer at the named place of destination. Inspection(s)-Pay for the costs of pre-shipment inspection( s) except inspections required by the country of export. Other-Provide the seller. 2. 3. Notice to Seller-If. . Costs-Pay all costs until the goods have been delivered to the named place of destination. Provide the buyer with information necessary to obtain insurance. 8. Carriage and Insurance-No obligation for either carriage or insurance.6. 7. 6. Costs-Pay all costs for the goods once they have been made available at the named place of destination. 4. Proof of Delivery. Marking-Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract. 5. according to the sales contract. Checking. 10. Buyer's Responsibilities (summary) 1. Risk Transfer-Assume all risk of loss or damage from the time the goods have been made available at the named place of destination. including carriage. to give the seller sufficient notice. at the seller's request. 10. Notice to the Buyer-Provide sufficient notice of dispatch and projected arrival that the buyer can take appropriate action to arrange unloading of the goods at the named place of destination. to the extent that the buyer has made transport circumstances known to the seller prior to the execution of the sales contract. Transport Documents-Provide the buyer with the delivery order and/or a transport document enabling the buyer to take delivery at the named place of destination. 9. 7. Payment-Pay for the goods as provided in the sales contract. 9. Licenses and Customs Formalities-Provide the seller at the seller's request. risk and cost any and all assistance in securing licenses. Other-Pay all costs associated with securing documentation necessary to make the goods available to the buyer at the named place of destination. Provide marking appropriate to the packaging. Transport Document-Accept the seller's transport document so long as it is in conformity with the sales contract. the buyer is able to specify a time for and/or a place of delivery. Packing. 8. documentation and authorizations necessary to import the goods.