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The World Trade Press Illustrated Guide to

INCOTERMS

20101
A comprehensive guide to the 11 INCOTERMS 2010

Professional Industry Report


2 World Trade Press

World Trade Press CONTENTS


Illustrated Guide to Incoterms 2010*
Introduction to Incoterms 2010 . . . . . . . . . . . . . . . . . . . 3
Incoterm Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Incoterm Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Important Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes on Incoterms 2010 . . . . . . . . . . . . . . . . . . . . . . . . 5

800 Lindberg Lane, Suite 190 E TERMS


Petaluma, California 94952 USA Departure Terms
Tel: +1 (707) 778-1124 x 3 EXW
Fax: +1 (707) 778-1329 Ex Works
www.WorldTradePress.com (. . . named place of delivery) . . . . . . . . . . . . . . . . . . . . . 6
sales@WorldTradePress.com
F TERMS
Copyright Notices Main Carriage Unpaid Terms
World Trade Press Illustrated Guide to Incoterms 2010 FCA
Copyright 2000-2010 by World Trade Press. All Rights Free Carrier
Reserved. Reproduction or translation of any part of this (. . . named place of delivery) . . . . . . . . . . . . . . . . . . . . . 8
work without the express written permission of the FAS
copyright holder is unlawful. Requests for permissions Free Alongside Ship
and/or translation or electronic rights should be ad- (. . . named port of shipment) . . . . . . . . . . . . . . . . . . . . 10
dressed to Publisher at the above address. FOB
Free On Board
Additional Copyright and Trademark Notices (. . . named port of shipment) . . . . . . . . . . . . . . . . . . . . 12
Incoterms is a registered trademark of the International
Chamber of Commerce (ICC), Paris, France and is used C TERMS
here for informational purposes only. The text of Inco-
terms 2010 is 2010 by ICC Publishing S.A. The full text
Main Carriage Paid Terms
CFR
of Incoterms 2010 is contained in ICC publication No. Cost and Freight
715, ISBN 978-92-8420080-1. In the USA contact ICC (. . . named port of destination) . . . . . . . . . . . . . . . . . . 14
Publishing, Inc., 1212 Avenue of the Americas, 21st Floor, CIF
New York, New York 10036, Tel: +[1] (212) 703-5066, Cost, Insurance and Freight
www.iccbooksusa.net. ICC HQ are ICC Publishing S.A., (... named port of destination) . . . . . . . . . . . . . . . . . . . 16
38 Cours Albert, 1er, 75008 Paris, France, Tel: +[33] (1) CPT
49 53 28 28, www.iccbooks.com. Carriage Paid To
*This World Trade Press Illustrated Guide to In- (. . . named place of destination) . . . . . . . . . . . . . . . . . . 18
coterms 2010 is independently authored and CIP
published and is not sponsored or endorsed by, or Carriage and Insurance Paid To
affiliated with, the ICC. (. . . named place of destination) . . . . . . . . . . . . . . . . . . 20

D TERMS
Arrival Terms
DAT
Delivered At Terminal
(. . . named terminal at port or place of destination) . . 22
DAP
Delivered At Place
(. . . named place of destination) . . . . . . . . . . . . . . . . . . 24
DDP
Delivered Duty Paid
(. . . named place of destination) . . . . . . . . . . . . . . . . . . 26

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


World Trade Press Illustrated Guide to Incoterms 2010 3

The World Trade Press


Illustrated Guide to Incoterms 20101
While the terms of sale in international business sound sim- tiple times before arrival, by giving the seller the option
ilar to those used in domestic contracts, they often have dif- to procure goods shipped.
ferent meanings. Confusion over these terms can result in Use of Incoterms
diminished profits or lost sales. Incoterms are not laws enacted by governments. Rather,
Incoterms they are rules agreed to by parties to a contract.
By the 1920s, international traders had developed a set of Also, Incoterms are not implied into contracts for the sale of
trade terms to describe their rights and obligations with regard goods. If you desire to use Incoterms, you must specifically
to the sale and transport of goods. These terms consisted of include them in your contract. Your contract should expressly
short abbreviations for lengthy contract provisions. Unfortu- refer to a specific version of Incoterms. For example:
nately, there was no uniform interpretation of these terms. CIF Oakland, California, USA, Incoterms 2010
To improve this aspect of international trade, the Interna-
tional Chamber of Commerce (ICC) in Paris developed In- Incoterms Do . . .
coterms (INternational COmmercial TERMS), a set of Incoterms 2010 may be included in a sales contract if the
uniform rules for the interpretation of terms defining the parties desire the following:
costs, risks, and obligations of buyers and sellers in interna- 1. To complete a sale of goods.
tional transactions. First published in 1936, these rules have 2. To indicate each contracting partys costs, risks, and obli-
been periodically revised to account for changing modes of gations concerning these aspects of delivery:
transport, document delivery, and security. a. When is the delivery completed?
b. How does a party ensure that the other party has met
Incoterms 2010 the standard of performance?
In late 2010 the ICC issued its latest revision, Incoterms c. Which party must obtain requisite licenses and comply
2010. Please note: with government-imposed import/export formalities?
1. The new rules enter into force on January 1, 2011. d. What are the modes and terms of carriage?
2. Contracts are interpreted by the version of Incoterms e. What are the delivery terms?
referred to in the contract. Therefore, only a contract f. When is the risk of loss transferred from the seller to
that refers to Incoterms 2010 will be governed by rules the buyer?
from that version. g. How will transport and other costs be divided be-
Incoterms 2010 vs. Incoterms 2000 tween the parties?
Incoterms 2010 rules incorporate a number of changes from h. What notices are the parties required to give to each
Incoterms 2000. Here are some key items: other regarding the transport and transfer of the goods?
1. Incoterms 2000 had 13 rules whereas Incoterms 2010 3. To establish basic terms of transport and delivery in a
has 11 rules. For Incoterms 2010, four of the D rules: short format.
DAF, DES, DEQ, and DDU were dropped, and two Incoterms Do Not . . .
new D rules were created: DAT and DAP Incoterms 2010 are not sufficient on their own to express
2. In Incoterms 2000, a number of rules, such as FOB, es- the full intent of the parties. They do not:
tablished that the seller delivers the goods when they 1. Apply to con tracts for services.
pass the ships rail. In Incoterms 2010 these rules re- 2. Define contractual rights and obligations other than for
quire that the goods be delivered on board the vessel. delivery.
3. Incoterms 2000 established four groups of rules: 3. Specify details of the transfer, transport, and delivery
E: Departure, F: Main Carriage Unpaid, C: Main Car- of the goods.
riage Paid, and D: Arrival. Incoterms 2010, however, es- 4. Determine how title to the goods will be transferred.
tablishes two classes: 1) rules applicable for all modes of 5. Protect a party from risk of loss.
transport, and 2) rules applicable only for sea and inland 6. Define the remedies for breach of contract.
waterway transport. See the next page for details.
4. Incoterms 2010 gives electronic communications the same Illustrated Guide to Incoterms 2010
status as paper communication so long as the parties agree. The World Trade Press Illustrated Guide to Incoterms
5. Incoterms 2010 rules obligate both seller and buyer to 2010 was designed to give a graphic representation of the
give assistance in securing security clearances. buyers and sellers risks and costs under each of the 11 In-
6. Incoterms 2010 now acknowledges the existence of coterms. The material on each facing page gives a summary
string sales, where goods in transit may be sold mul- of seller and buyer responsibilities.

1. Incoterms is a registered trademark of the International Chamber of Commerce (ICC), and is used here for informational purposes only.
This illustrated guide is independently authored and published and is not sponsored or endorsed by, or affiliated with the ICC. The full
text of Incoterms 2010 (117 pages) is contained in ICC publication No. 715, ISBN 978-92-8420080-1. Contact ICC Publishing, Inc.,
1212 Avenue of the Americas, 21st Floor, New York, NY 10036 USA, Tel: +[1] (212) 703-5066, www.iccbooksusa.net, or ICC Publish-
ing S.A., 38 Cours Albert, 1er, 75008 Paris, France, Tel: +[33] (1) 49 53 28 28, www.iccbooks.com.
The World Trade Press Illustrated Guide to Incoterms 2010 is 2000-2010 by World Trade Press.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


4 World Trade Press Illustrated Guide to Incoterms 2010

Incoterms Groups Incoterms Classes


In the past, Incoterms were arranged into four groups: As mentioned, picking an inappropriate term can present
E (Departure), F (Main carriage unpaid), C (Main carriage problems. The pages describing individual Incoterms will
paid), and D (Arrival). Traders, however, were mistakenly assist you in making the right choice, but for the moment,
picking ocean transport terms (like FOB) for shipments by you should know that some terms are applicable for all
air. Incoterms 2010 classifies terms by mode of transport, modes of transport, while others are applicable only for sea
but the four original groupings remain valid: and inland waterway transport.

Incoterms 2010 Groups Incoterms 2010 Classes


Group E EXW EX Works All modes EXW EX Works
Departure (...named place of delivery) of (...named place of delivery)
transport
Group F FCA Free CArrier including FCA Free CArrier
Main (...named place of delivery) multimodal (...named place of delivery)
Carriage
Unpaid FAS Free Alongside Ship CPT Carriage Paid To
(...named port of shipment) (...named place of destination)

FOB Free On Board CIP Carriage and Insurance Paid To


(...named port of shipment) (...named place of destination)

Group C CFR Cost and FReight DAT Delivered at Terminal


Main (...named port of destination) (...named terminal at port or
Carriage place of destination)
Paid CIF Cost Insurance and Freight
(...named port of destination) DAP Delivered At Place
(...named place of destination)
CPT Carriage Paid To
(...named place of destination) DDP Delivered Duty Paid
(...named place of destination)
CIP Carriage and Insurance Paid To
(...named place of destination) Sea and FAS Free Alongside Ship
inland (...named port of shipment)
Group D DAT Delivered At Terminal waterway
Arrival (...named terminal at port or transport FOB Free On Board
place of destination) only (...named port of shipment)

DAP Delivered At Place CFR Cost and FReight


(...named place of destination) (...named port of destination)

DDP Delivered Duty Paid CIF Cost Insurance and Freight


(...named place of destination) (...named port of destination)

Definitions
deliveryIn common usage, delivery is the act of multimodalUse of more than one mode of transport
delivering something, while the place of delivery is of- (road, rail, sea, air) to transport goods (or people) from ori-
ten the buyers place of business. In Incoterms 2010, gin to final destination.
however, delivery is the point where the risk of loss carrierIn common usage, a carrier is a firm that
or damage passes from the seller to the buyer. This is transports goods or passengers for hire, rather than sim-
often the named port or place but not necessarily the ply arranging for such transport. In Incoterms, however,
buyers place of business. the carrier can be any person or firm who by contract
pre-carriageThe initial transport of goods from the undertakes to perform or procure such services. The
sellers premises to the main port or place where main car- buyer nominates the carrier and the seller need only
riage begins. Usually by truck, rail, or inland waterway. accept the nomination for the term to work.
main carriageThe primary transport of goods, gen- string saleThe sale, and successive resale, of a single
erally for the longest part of the journey and generally shipment of goods while en route from place of shipment
from one country to another. Usually by sea vessel or to final destination. This is common in the commodity
by airplane, but also by truck, rail, or inland waterway. trade, where oil, grain, and ore shipments are sold and re-
onward carriageTransport from the port, terminal, or sold before the vessel arrives in port. A number of Inco-
place of arrival in the country of destination to the buyers terms now take this practice into account by giving the
premises. Usually by truck, rail, or inland waterway. seller the option to procure goods already so delivered.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


World Trade Press Illustrated Guide to Incoterms 2010 5

Notes on Incoterms
1. Underlying ContractIncoterms were designed to have to assume risks and costs associated with export
be used within the context of a written contract for the and import formalities and duties. In some cases, for-
sale of goods (not services). Incoterms, therefore, re- eign exporters may not be able to obtain import licenses
fer to the contract of sale, rather than the contract of in the country of import. Parties should research the
carriage of the goods. Buyers and sellers should spec- pertinent local trade laws before using such terms.
ify that their contract be governed by Incoterms 2010. 9. Variants of Incoterms (Added Wording)
2. Two ComponentsEach Incoterm has two compo- Incoterms give no guidance regarding the addition of
nents: the term name, and a named place, port, or termi- words to individual terms. In practice, the seller and
nal. For example: EXW, Sellers warehouse located at buyer may agree to added wording. For example, if the
___. Or, DDP, Buyers warehouse located at ___. An seller agrees to DDP terms, agreeing to pay for customs
Incoterm is incomplete without both components. formalities and import duties but not for VAT (value
3. Precise Point of DeliveryIn addition to a specific added tax), the term DDP VAT Unpaid may be used.
named port, place, or terminal, it may be neces- Adding wording to an Incoterm, however, may present a
sary to name a precise point of delivery. For exam- risk if the wording contradicts the fundamental meaning
ple, the original terms of sale may state CFR Port of of the Incoterm itself. For example, if the seller agrees to
Rotterdam. The Port of Rotterdam, however, is CIF, seller responsible for unloading the aircraft, there
huge. The buyer who prefers a particular point within is an inherent problem, because CIF can only be used for
the port should name the specific point in the sales transport by sea or inland waterway. Use additional
contract and in the trade term. This may be an impor- wording only if you are certain that it is consistent with
tant issue in situations where the buyer is responsible the meaning of the term used.
for unloading, storage, and other charges once the 10. PackingIt is the responsibility of the seller to provide
goods have been made available at the named place. packaging unless the goods shipped are conventionally
In some cases it may not be possible for the buyer to shipped unpackaged (commodities such as oil or grain). In
name the precise point of delivery at the time of con- most situations it is best if the buyer and seller agree in the
tract. However, if the buyer does not do so in a timely sales contract on the type and extent of packing required.
manner, the seller may make delivery within a range However, it may not be possible to know beforehand the
of places that is within the terms of the contract, but type or duration of transport. As a result, it is the responsi-
inconvenient for the buyer. bility of the seller to provide for safe and appropriate pack-
4. EXW and FCAThe buyer who purchases on Ex aging, but only to the extent that the buyer has made the
Works (EXW) or Free Carrier (FCA) terms will need circumstances of the transport known beforehand. If the
to arrange for the contract of carriage. Also, since the seller is responsible for packing goods in an ocean or air
seller will not receive a bill of lading, using a letter of freight container, their responsibility includes stuffing the
credit requiring a bill of lading will not be possible. container properly to withstand shipment.
5. EDI: Electronic Data InterchangeIt is increas- 11. InspectionThere are several issues related to inspec-
ingly common for sellers to prepare and transmit doc- tions: a) the seller is responsible for costs of inspection to
uments electronically. Incoterms provide for EDI and make certain the quantity and quality of the shipment are
electronic documents so long as buyers and sellers in conformity with the sales contract; b) pre-shipment in-
agree on their use in the sales contract. spections as required by the export authority are the re-
6. Insurable InterestIn most cases, neither the buyer sponsibility of the party responsible for export
nor the seller is obligated to provide insurance. In fact, formalities; c) import inspections as required by the im-
only two Incoterms mention insurance: CIP and CIF. port authority are the responsibility of the party responsi-
In both cases the seller is obligated to secure insur- ble for import formalities; and d) third-party inspections
ance for the buyer, but only for minimum coverage. for independent verification of quality and quantity (if re-
The seller and buyer, however, may have insurable quired) are generally the responsibility of the buyer. The
interest in the goods, and prudence may dictate pur- buyer may require such an inspection and inspection
chase of insurance coverage or additional insurance document as a condition of payment.
coverage. 12. Passing of Risks and CostsIn all E, F, and D terms,
7. Customs of the Port or TradeIncoterms are an both risks and costs pass from seller to buyer at the named
attempt to standardize trade terms for all nations and place, port, or terminal. In all C terms, however, the trans-
all trades. However, different ports and different fer of risks occurs at a different point than the transfer of
trades have their own customs and practices. It is best costs. Refer to each term for details.
if such practices are specified in the sales contract. 13. CarrierIn common usage, a carrier is a firm that
8. Export/Import Customs ClearanceIt is usually transports goods or passengers for hire, rather than
desirable that export customs formalities be handled by simply arranging for such transport. In Incoterms,
the seller and import customs formalities be handled by however, carrier is the party with whom carriage is
the buyer. However, some trade terms (such as EXW) contracted and can be any person or firm. In practice,
require that the buyer handle export formalities, while the buyer nominates the carrier and the seller need
others, such as DDP, require that the seller handle im- only accept the nomination. It is recommended that
port formalities. In each case, the buyer and seller will the carrier be named in the sales contract.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


6

EXW SELLER BUYER

Ex Works (. . . named place of delivery)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

EXW, Ex Works (. . . named place of delivery)


In Ex Works, the seller/exporter/manufacturer merely the contracts of sale and carriage the precise point of delivery. Payment terms for Ex Works transactions are generally
makes the goods available to the buyer at the sellers The EXW term is generally not recommended for inter- cash in advance and open account.
named place of delivery, which is commonly, but not national trade transactions, as loading the goods at the
Examples
necessarily, the sellers place of business. sellers named place and handling export formalities usu- EXW, ABC Factory, Full Address, Paris, France
With EXW, the seller has no responsibility to load the ally places too much of a burden upon the buyer. EXW, XYZ Printing Plant, Full Address, Singapore
goods onto a truck or other transport vehicle or to clear the If the buyer cannot handle loading the goods or export
goods for export. This trade term places the greatest re- formalities, the EXW term should not be used. In such a Modes of Transport
sponsibility on the buyer and minimum obligations on the case, FCA is recommended. AirYes
seller. The EXW term is often used when making an initial quo- RailYes

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


The parties to the transaction, however, may stipulate that the tation for the sale of goods. It represents the cost of the RoadYes
seller be responsible for loading the goods onto a transport ve- goods without any other costs included. SeaYes
hicle at the risk and cost of the buyer. Such a stipulation is a The EXW term is commonly used in courier shipments Inland WaterwayYes
variant and must be made within the contract of sale. when the courier picks up the shipment from clients MultimodalYes
When using the FCA term, it is advisable to clearly specify in premises and loads couriers own truck.
World Trade Press Illustrated Guide to Incoterms 2010
EXW
Ex Works (. . . named place of delivery)
Incoterm Category has no obligation to provide the buyer with a delivery 4. Taking DeliveryTake delivery of the goods as
EXW specifies that the seller/exporter/manufacturer merely document. provided in the sales contract.
makes the goods available to the buyer, not cleared for ex- 9. Checking, Packing, MarkingPay all costs associ- 5. Risk TransferAssume all risk of loss or damage
port, at the sellers named place of delivery, which is com- ated with checking the quality and quantity of the goods from the time the goods have been delivered (made
monly, but not necessarily, the sellers place of business. to be in conformity with the sales contract. available) at the named place of delivery as provided
Note: Documents may be paper or electronic, as custom- Package the goods, unless the goods are conventionally in the sales contract. Assume all risk of loss or dam-
ary or as agreed to by the parties to the transaction. sold unpackaged. Package the goods as the seller deems age if the goods are not picked up at the agreed-upon
Modes of Transport Covered appropriate for transport, unless the buyer has given spe- time and place.
cific requirements prior to the finalization of the sales 6. CostsPay all costs from the time the goods have
All modes of transport including multimodal.
contract. Provide marking appropriate to the packaging. been delivered (made available) at the named place of
Sellers Responsibilities (summary) 10. OtherTimely provide the buyer, at the buyers request delivery. Pay all costs related to carriage of the goods
1. GoodsProvide the goods, commercial invoice, and and cost, with assistance in securing information and doc- from the named place of delivery to the buyers final
other documentation as required by the sales contract. uments, including security information, the buyer requires destination. Pay all costs resulting from failure to take
2. Licenses, Security, and Customs Formalities for export, transport, and import of the goods to the final delivery at the named place and time. Pay all costs re-
Provide the buyer, at the buyers risk and cost, assis- destination. lating to export and import formalities, duties, fees,
tance in securing any license, documents, authoriza- and taxes, and other charges including transshipment.
tions, and security clearance required for the export of 7. Notice to SellerIf, according to the sales contract,
the goods. the buyer is entitled to specify a time for taking deliv-
3. Carriage and InsuranceThe seller has no obliga- ery or the point of taking delivery at the named place
World Trade Press Illustrated Guide to Incoterms 2010

tion to provide for carriage of goods or for insurance. of delivery, to give seller sufficient notice.
Provide the buyer, at the buyers request and cost (if 8. Proof of DeliveryProvide the seller with evidence
any), information required to obtain insurance. of taking delivery.
4. DeliveryMake the goods available to the buyer at 9. Inspection(s)Pay for pre-shipment inspections in-
the named place and point of delivery at the time stipu- cluding those required by the country of export.
lated in the sales contract. If the buyer has not stipu- 10. OtherTimely advise the seller of any security-related
Buyers Responsibilities (summary)
lated a specific point at the named place of delivery, the data requirements. Reimburse the seller for sellers costs
1. PaymentPay for the goods as provided in the sales
seller may pick one that suits sellers purposes. related to securing information or documentation, in-
contract.
5. Risk TransferAssume all risks of loss or damage cluding security information, the buyer requires for ex-
2. Licenses, Security, and Customs Formalities
to the goods until they have been made available to the port and import formalities, security clearance, and
Obtain any export and import licenses or authoriza-
buyer at the named place of delivery, at the agreed- transport of the goods to the final destination.
tions, and handle all export and import customs for-
upon time stipulated in the sales contract.
malities.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


6. CostsPay all costs until the goods have been made
3. Carriage and InsuranceBuyer has no obligation
available to the buyer at the named place of delivery.
to seller for carriage or insurance.
7. Notice to the BuyerProvide notice that enables
Provide for carriage of the goods from the named
the buyer to take delivery of the goods.
place of delivery to the buyers destination.
8. Delivery and Transport Document(s)The seller
7
8

FCA SELLER BUYER

Free Carrier (. . . named place of delivery)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

FCA, Free Carrier (. . . named place of delivery)


In Free Carrier, the seller/exporter/manufacturer clears In the FCA term, however, the carrier can be any person Examples
the goods for export and delivers them to the carrier who by contract undertakes to perform or procure such FCA, ABC Shipping, Door 4, Full Address, Hamburg,
specified by the buyer at the named place of delivery. services by any of the above methods of transport includ- Germany
If the named place of delivery is the sellers place of busi- ing multimodal. Therefore, a person, such as a freight for- FCA, XYZ Airlines Cargo Terminal, San Francisco In-
ness, the seller is responsible for loading the goods onto warder, can act as a carrier. With the FCA term, the ternational Airport (SFO), USA
the transport vehicle. If the named place is any other loca- buyer nominates the carrier, and the seller need only ac-
tion, such as the loading dock of the carrier, the seller is not cept the nomination for the term to work. Modes of Transport
AirYes
responsible for unloading. The FCA term may be used for any mode of transport in-
When using the FCA term, it is advisable to clearly specify in cluding multimodal. RailYes

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


the contracts of sale and carriage the precise point of delivery. With FCA, the named place of delivery is domestic to the RoadYes
Carrier has a special meaning. Technically, a carrier is a buyer. SeaYes
firm that itself transports goods or passengers for hire, rather The FCA term is often used when making an initial quo- Inland WaterwayYes
than simply arranging for such transport. Examples are a tation for the sale of goods. MultimodalYes
shipping line, airline, trucking firm, or railway.
World Trade Press Illustrated Guide to Incoterms 2010
FCA
Free Carrier (. . . named place of delivery)
Incoterm Category time stipulated in the sales contract. 3. Carriage and InsuranceProvide for carriage of
FCA is an F term specifying that the seller/exporter/ 6. CostsPay all costs until the goods have been deliv- the goods from the named place of delivery.
manufacturer is responsible for delivering the goods to ered to the carrier at the named place of delivery. Pay Buyer has no obligation to the seller for insurance.
the carrier, export cleared, at the named place of deliv- all costs relating to export, including customs formal- 4. Taking DeliveryTake delivery of the goods as
ery, but does not bear risk or costs afterwards. ities, duties, and taxes. provided in the sales contract.
Note: Documents may be paper or electronic, as custom- 7. Notice to the BuyerAt buyers risk and cost, pro- 5. Risk TransferAssume all risk of loss or damage
ary or as agreed to by the parties to the transaction. vide notice to the buyer that the goods have been de- from the time the goods have been delivered to the
Modes of Transport Covered livered to the carrier, or that the carrier did not take carrier at the named place of delivery. Assume all risk
possession of the goods at the agreed-upon time. of loss or damage and other costs if the buyers carrier
All modes of transport including multimodal.
8. Delivery and Transport Document(s)Provide fails to take delivery at the agreed-upon time and
Sellers Responsibilities (summary) the buyer with a proof of delivery. At the buyers re- place.
1. GoodsProvide the goods, commercial invoice, and quest, if the proof of delivery is not a transport docu- 6. CostsPay all costs for carriage and insurance from
other documentation as required by the sales contract. ment, help the buyer obtain a transport document. the time the goods have been delivered to the carrier
2. Licenses, Security, and Customs Formalities 9. Checking, Packing, MarkingPay all costs associ- at the named place of delivery. Pay all costs resulting
Obtain at own risk and cost all required export li- ated with checking the quality and quantity of the goods from failure to take delivery at the named place and
censes, documents, and authorizations and carry out to be in conformity with the sales contract. Provide pre- time. Pay all costs relating to import formalities, du-
export formalities and procedures. shipment inspections as required for export formalities. ties, fees, and taxes, and other charges including
3. Carriage and InsuranceThe seller has no obliga- Package the goods, unless the goods are conventionally transshipment.
tion to provide for carriage of goods or for insurance. sold unpackaged. Package the goods as the seller deems 7. Notice to SellerGive sufficient notice to the seller
At the request of the buyer, the seller may contract for appropriate for transport, unless the buyer has given spe- of the name of the carrier, the delivery point, the time
World Trade Press Illustrated Guide to Incoterms 2010

carriage on standard industry terms at the buyers risk cific requirements prior to the finalization of the sales or period for delivery, and the mode of transport.
and cost. contract. Provide marking appropriate to the packaging. 8. Proof of DeliveryAccept the sellers delivery doc-
Provide information to enable the buyer to obtain 10. OtherTimely provide the buyer, at the buyers request ument if it is in conformity with the sales contract.
insurance. and cost, assistance in securing information and docu- 9. Inspection(s)Pay for pre-shipment inspections un-
4. DeliveryDeliver the goods to the carrier at the ments, including security information, the buyer requires less such is required by the country of export.
named place of delivery at the time stipulated in the for transport and import of the goods to the final destina- 10. OtherTimely advise the seller of any security-related
sales contract. If the named place of delivery is the tion. Reimburse the buyer for buyers costs related to se- data requirements. Reimburse the seller for sellers costs
sellers place of business, the seller is responsible for curing information and documents, including security related to securing information or documentation, in-
loading the goods onto the transport vehicle. If the information the seller requires for export formalities and cluding security information, that the buyer requires for
named place is any other location, such as the loading security clearance of the goods. import formalities, security clearance, and transport of
dock of the carrier, the seller is not responsible for un- the goods to the final destination.
Buyers Responsibilities (summary)

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


loading. If the buyer has not stipulated a specific point Timely provide the seller, at the sellers request and cost,
1. PaymentPay for the goods as provided in the sales
at the named place of delivery, the seller may pick one with any documents and information required for ex-
contract.
that suits sellers purposes. port, transport, and security clearance of the goods to the
2. Licenses, Security, and Customs Formalities
5. Risk TransferAssume all risk of loss or damage to named place of delivery.
Obtain any import licenses or authorizations and han-
the goods until they have been delivered to the carrier
dle all import customs formalities.
9

at the named place of delivery, within the agreed-upon


10

FAS SELLER BUYER

Free Alongside Ship (. . . named port of shipment)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Sea or Inland Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Waterway Only Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

FAS, Free Alongside Ship (. . . named port of shipment)


In Free Alongside Ship, the seller/exporter/manufacturer during transport, as is common in the commodity trade. Examples
clears the goods for export and places them alongside the The FAS term is commonly used in the sale of bulk com- FAS, ABC Shipping Line, Dock #2, Port Elizabeth,
ship (on a dock or barge) at the named port of ship- modity cargo such as oil, grains, and ore. South Africa
ment. If the shipment is containerized or to be containerized, FAS, XYZ Shipping Line, Quay #4, Le Havre, France
When using the FAS term, it is advisable to clearly specify common practice is to deliver the shipment to the carrier
Modes of Transport
in the contract of sale, and in contracts of carriage, not only at a terminal and not alongside a ship. In such situations,
AirNo
the named port of shipment, but also the precise loading the FCA term is recommended.
point at or within the named port of shipment. This is par- The named place in FAS is a port, and therefore the term is RailNo
ticularly the case when the named port of shipment is used only for ocean or inland waterway transport. RoadNo

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


large and options abound for delivery points. With FAS, the named port of shipment is domestic to the SeaYes
With FAS, the seller has the option to deliver the goods seller. Inland WaterwayYes
alongside the ship, or to procure goods already so deliv- Usual payment terms for FAS transactions are cash in ad- MultimodalNo
ered. This is a reference to so-called string sales vance and open account, but letters of credit are also
where a single shipment might be resold multiple times used.
World Trade Press Illustrated Guide to Incoterms 2010
FAS
Free Alongside Ship (. . . named port of shipment)
Incoterm Category 7. Notice to the BuyerAt buyers risk and cost, pro- 3. Carriage and InsuranceProvide for loading and
FAS is an F term specifying that the seller/exporter is re- vide notice to the buyer that the goods have been de- carriage of the goods from the named port of shipment.
sponsible for delivering the goods, export cleared, along- livered alongside the ship at the named port of Buyer has no obligation to the seller for insurance.
side the ship, but does not bear risk or costs afterwards. shipment, or that the ship did not take possession of 4. Taking DeliveryTake delivery of the goods as
Note: Documents may be paper or electronic, as custom- the goods at the agreed-upon time. provided in the sales contract.
ary or as agreed to by the parties to the transaction. 8. Delivery and Transport Document(s)Provide 5. Risk TransferAssume all risk of loss or damage
Modes of Transport Covered the buyer with a proof of delivery that the goods have from the time the goods have been delivered along-
been delivered alongside the ship at the named port of side the ship at the named port of shipment as pro-
Used only for ocean or inland waterway transport.
shipment. At the buyers request, if the proof of deliv- vided in the sales contract. If the buyer nominates the
Sellers Responsibilities (summary) ery is not a transport document, help the buyer obtain a ship, assume all risk of loss or damage and costs if the
1. GoodsProvide the goods, commercial invoice, and transport document. named ship does not arrive on time, or if the ship fails
other documentation as required by the sales contract. 9. Checking, Packing, MarkingPay all costs associ- to take the goods, or if sufficient notice is not given to
2. Licenses, Security, and Customs Formalities ated with checking the quality and quantity of the goods seller regarding ship name, loading point, and time.
Obtain at own risk and cost all required export li- to be in conformity with the sales contract. Provide pre- 6. CostsPay all costs for carriage and insurance from the
censes, documents, and authorizations and carry out shipment inspections as required for export formalities. time the goods have been delivered alongside the ship at
export formalities and procedures. Package the goods, unless the goods are conventionally the named port of shipment. Pay all costs resulting from
3. Carriage and InsuranceThe seller has no obliga- sold unpackaged. Package the goods as the seller deems failure to take delivery at the named place and time. Pay
tion to provide for main carriage of goods or for in- appropriate for transport, unless the buyer has given spe- all costs relating to import formalities, duties, fees, and
surance. At the request of the buyer, the seller may cific requirements prior to the finalization of the sales taxes, and other charges including transshipment.
contract for carriage on standard industry terms at the contract. Provide marking appropriate to the packaging. 7. Notice to SellerIf the buyer nominates the ship, give
World Trade Press Illustrated Guide to Incoterms 2010

buyers risk and cost. 10. OtherTimely provide the buyer, at the buyers re- sufficient notice to the seller of the name of the ship, the
No obligation to provide insurance. Provide information quest and cost, assistance in securing information and loading point, and the time or period for delivery.
to enable the buyer to obtain insurance. documents, including security information, required by 8. Proof of DeliveryAccept the sellers delivery doc-
4. DeliveryDeliver the goods alongside the ship at the buyer for transport and import of the goods to the ument if it is in conformity with the sales contract.
the named port of shipment, or procure the goods so final destination. Reimburse the buyer for buyers costs 9. Inspection(s)Pay for pre-shipment inspections un-
delivered, within the agreed-upon time stipulated in related to securing information and documents, includ- less such is required by the country of export.
the sales contract. If the buyer has not stipulated a ing security information, the seller requires for export 10. OtherTimely advise the seller of any security-related
specific loading point at the named port of shipment, formalities and security clearance of the goods to the data requirements. Reimburse the seller for sellers costs
the seller may pick one that suits sellers purposes. named port of shipment. related to securing information or documentation, in-
5. Risk TransferAssume all risks of loss or damage cluding security information, that the buyer requires for
to the goods until they have been delivered alongside import formalities, security clearance, and transport of
Buyers Responsibilities (summary)

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


the ship at the named port of shipment within the the goods to the final destination.
1. PaymentPay for the goods as provided in the sales
agreed-upon time stipulated in the sales contract. Timely provide the seller, at the sellers request and cost,
contract.
6. CostsPay all costs until the goods have been deliv- with any documents and information required for ex-
2. Licenses, Security, and Customs Formalities
ered alongside the ship at the named port of shipment. port, transport, and security clearance of the goods to the
Obtain any import licenses or authorizations and han-
Pay all costs relating to export, including customs for- named port of shipment.
dle all import customs formalities.
11

malities, duties, and taxes.


12

FOB SELLER BUYER

Free On Board (. . . named port of shipment)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Sea or Inland Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Waterway Only Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

FOB, Free On Board (. . . named port of shipment)


In Free On Board, the seller/exporter/manufacturer clears If the shipment is containerized or to be containerized, transport. The FCA term, on the other hand, is applicable
the goods for export and delivers them on board the common practice is to deliver the shipment to the carrier to all modes of transport.
named vessel at the named port of shipment. at a terminal and not on board a ship. In such situations,
Examples
This is a change from Incoterms 2000, where the seller was the FCA term is recommended. FOB, ABC Shipping Line, Vessel XYZ, Buenos Aires,
responsible only to deliver the goods past the ships rail. The FOB term is commonly used in the sale of bulk Argentina
With FOB, the seller has the option to deliver the goods commodity cargo such as oil, grains, and ore. FOB, DEF Shipping Line, Vessel UVW, Gdansk, Poland
on board the vessel, or to procure goods already so de- The key document in FOB transactions is the On Board
livered. This is a reference to so-called string sales, Bill of Lading. Modes of Transport
where a single shipment might be resold multiple times The named place in FOB is a port, and therefore the term is AirNo

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


during transport, as is common in the commodity trade. used only for ocean or inland waterway transport. RailNo
The named place in FOB is a port and therefore the term is Sellers and buyers often misuse the FOB term. FOB does RoadNo
used only for ocean or inland waterway transport. not mean loading goods onto a truck or train at the sellers SeaYes
With FOB, the named port of shipment is domestic to the place of business. FOB is used only in reference to deliver- Inland WaterwayYes
seller. ing the goods on board a ship in ocean or inland waterway MultimodalNo
World Trade Press Illustrated Guide to Incoterms 2010
FOB
Free on Board (. . . named port of shipment)
Incoterm Category customs formalities, duties, and taxes. 3. Carriage and InsuranceProvide for carriage of
FOB is an F term specifying that the seller/exporter is 7. Notice to the BuyerAt buyers risk and cost, pro- the goods from the named port of shipment.
responsible for delivering the goods, export cleared, on vide notice to the buyer that the goods have been de- Buyer has no obligation to the seller for insurance.
board a ship, but does not bear risk or costs afterwards. livered on board the ship at the named port of 4. Taking DeliveryTake delivery of the goods as
Note: Documents may be paper or electronic, as custom- shipment, or that the ship did not take possession of provided in the sales contract.
ary or as agreed to by the parties to the transaction. the goods at the agreed-upon time. 5. Risk TransferAssume all risk of loss or damage
Modes of Transport Covered 8. Delivery and Transport Document(s)Provide from the time the goods have been delivered on board the
the buyer with a proof of delivery that the goods have ship at the named port of shipment. If the buyer nominates
Used only for ocean or inland waterway transport.
been delivered on board the ship at the named port of the ship, assume all risk of loss or damage and costs if the
Sellers Responsibilities (summary) shipment. At the buyers request, if the proof of deliv- named ship does not arrive on time, or if the ship fails to
1. GoodsProvide the goods, commercial invoice, and ery is not a transport document, help the buyer obtain take the goods, or if sufficient notice is not given to seller
other documentation as required by the sales contract. a transport document. regarding ship name, loading point, and time.
2. Licenses, Security, and Customs Formalities 9. Checking, Packing, MarkingPay all costs associ- 6. CostsPay all costs for carriage and insurance from
Obtain at own risk and cost all required export li- ated with checking the quality and quantity of the goods the time the goods have been delivered on board the
censes, documents, and authorizations and carry out to be in conformity with the sales contract. Provide pre- ship at the named port of shipment. Pay all costs re-
export formalities and procedures. shipment inspections as required for export formalities. sulting from failure to take delivery at the named
3. Carriage and InsuranceThe seller has no obliga- Package the goods, unless the goods are conventionally place and time. Pay all costs relating to import for-
tion to provide for main carriage of goods or for in- sold unpackaged. Package the goods as the seller deems malities, duties, fees, and taxes, and other charges in-
surance. At the request and cost of the buyer, the appropriate for transport, unless the buyer has given spe- cluding transshipment.
seller may contract for carriage on standard industry cific requirements prior to the finalization of the sales 7. Notice to SellerIf the buyer nominates the ship, give
World Trade Press Illustrated Guide to Incoterms 2010

terms at the buyers risk and cost. contract. Provide marking appropriate to the packaging. sufficient notice to the seller of the name of the vessel,
No obligation to provide insurance. Provide information 10. OtherTimely provide the buyer, at the buyers request the loading point, and the time or period for delivery.
to enable the buyer to obtain insurance. and cost, assistance in securing information and docu- 8. Proof of DeliveryAccept the sellers delivery doc-
4. DeliveryDeliver the goods on board the named ves- ments, including security information, required by the ument if it is in conformity with the sales contract.
sel at the named port of shipment at the time stipulated buyer for transport and import of the goods to the final 9. Inspection(s)Pay for pre-shipment inspections un-
in the sales contract, or procure the goods so deliv- destination. Reimburse the buyer for buyers costs related less such is required by the country of export.
ered. If the buyer has not stipulated a specific loading to securing information and documents, including security 10. OtherTimely advise the seller of any security-related
point at the named port of shipment, the seller may information the seller requires for export formalities and data requirements. Reimburse the seller for sellers costs
pick one that suits sellers purposes. security clearance of the goods to the ship at the named related to securing information or documentation, in-
5. Risk TransferAssume all risks of loss or damage port of shipment. cluding security information, that the buyer requires for
to the goods until they have been delivered on board import formalities, security clearance, and transport of
Buyers Responsibilities (summary)

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


the ship at the named port of shipment, within the the goods to the final destination.
1. PaymentPay for the goods as provided in the sales
agreed-upon time stipulated in the sales contract. Timely provide the seller, at the sellers request and cost,
contract.
6. CostsPay all costs until the goods have been deliv- with any documents and information required for ex-
2. Licenses, Security, and Customs Formalities
ered on board the vessel at the named port of ship- port, transport, and security clearance of the goods to the
Obtain any import licenses or authorizations and han-
ment. Pay all costs relating to export, including named port of shipment.
dle all import customs formalities.
13
14

CFR SELLER BUYER

Cost and Freight (. . . named port of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Sea or Inland Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Waterway Only Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

CFR, Cost and Freight (. . . named port of destination)


In Cost and Freight, the seller/exporter/manufacturer clears With CFR, the seller has the option to deliver the goods on modity cargo such as oil, grains, and ore, b) oversize and over-
the goods for export and delivers them on board the ship at board the vessel, or to procure goods already so deliv- weight cargo that will not fit into an ocean container, and c)
the port of shipment (not destination). This is where risk ered. This is a reference to so-called string sales where cargo that exceeds the weight limitations of ocean containers.
passes from seller to buyer. a single shipment might be resold multiple times during
Examples
The seller, however, is responsible for contracting for and transport, as is common in the commodity trade. CFR, Terminal 2, Port of Oakland, California, USA
paying the costs associated with transport of the goods to the The named destination in CFR is a port, and therefore the CFR, ABC Terminal, Port of Tokyo, Japan
named port of destination. This is where costs transfer term is used only for ocean or inland waterway transport.
from seller to buyer. If the shipment is containerized or to be containerized, Modes of Transport
It is important to note that the transfer of risk from seller to common practice is to deliver the shipment to the carrier AirNo

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


buyer occurs at a different point than the transfer of costs. at a terminal and not on board a ship. In such situations, RailNo
When using the CFR term, it is advisable to clearly specify the CPT term is recommended. RoadNo
in the contract of sale, and in contracts of carriage, not only With CFR, the named port of destination is domestic to SeaYes
the named port of destination, but also the precise point at the buyer. Inland WaterwayYes
or within the named port of destination. The CFR term is commonly used the sale of a) bulk com- MultimodalNo
World Trade Press Illustrated Guide to Incoterms 2010
CFR
Cost and Freight (. . . named port of destination)
Incoterm Category ties, duties, and taxes, as well as costs required for 2. Licenses, Security, and Customs Formalities
CFR is a C term specifying that the seller is responsible transshipment through any country up to the named Obtain any import licenses or authorizations and han-
for delivering the goods on board the ship at the port of port of destination. dle all import customs formalities.
shipment and contracting and paying for carriage to the 7. Notice to the BuyerProvide notice that enables 3. Carriage and InsuranceBuyer has no obligation
named port of destination. C terms evidence ship- the buyer to take timely possession of the goods at the to the seller.
ment (as opposed to arrival) contracts. named port of destination. 4. Taking DeliveryTake delivery of the goods at the
Note: Documents may be paper or electronic, as custom- 8. Delivery and Transport DocumentsProvide the named port of destination as provided in the contract.
ary or as agreed to by the parties to the transaction. buyer with a transport document, dated within the period 5. Risk TransferAssume all risk of loss or damage
agreed, that allows the buyer to claim the goods at the from the time the goods have been delivered on board
Modes of Transport Covered
named port of destination and (unless otherwise agreed) the ship at the port of shipment (not destination).
All modes of transport including multimodal.
allows the buyer to sell the goods while in transit through 6. CostsPay any additional costs for the goods, other than
Sellers Responsibilities (summary) the transfer of the document or by notification to the sea main carriage, once they have been delivered on board the
1. GoodsProvide the goods, commercial invoice, and carrier. If a negotiable transport document is issued, a full ship at the port of shipment. Pay costs of unloading, light-
other documentation as required by the sales contract. set of originals must be given to the buyer. erage, and wharfage at the port of destination unless such
2. Licenses, Security, and Customs Formalities 9. Checking, Packing, MarkingPay all costs associ- costs were to be paid by seller under sellers contract for
Obtain at own risk and cost all required export licenses, ated with checking the quality and quantity of the goods carriage. Pay all costs relating to import formalities, duties,
documents, and authorizations and carry out export to be in conformity with the sales contract. Provide pre- fees, and taxes. Pay costs of onward carriage.
formalities and procedures. shipment inspections as required for export formalities. 7. Notice to SellerIf, according to the sales contract,
3. Carriage and InsuranceContract or procure a Package the goods, unless the goods are conventionally the buyer is entitled to specify a time for shipping or
World Trade Press Illustrated Guide to Incoterms 2010

contract for the carriage of the goods from the point sold unpackaged. Package the goods as the seller deems the point of receiving the shipment at the named port
of delivery to the named port of destination. appropriate for transport, unless the buyer has given spe- of destination, to give seller sufficient notice.
No obligation to provide insurance. Provide information cific requirements prior to the finalization of the sales 8. Proof of DeliveryAccept the sellers delivery doc-
to enable the buyer to obtain insurance. contract. Provide marking appropriate to the packaging. ument if it is in conformity with the sales contract.
4. DeliveryDeliver the goods on board the ship at the 10. OtherTimely provide the buyer, at the buyers request 9. Inspection(s)Pay for pre-shipment inspections un-
port of shipment (not destination) or procure goods al- and cost, assistance in securing information and docu- less such is required by the country of export.
ready so delivered within the agreed-upon time. ments, including security information, required by the 10. OtherTimely advise the seller of any security-related
5. Risk TransferAssume all risks of loss or damage buyer for import and transport of the goods from the data requirements. Reimburse the seller for sellers costs
to the goods until they have been delivered on board named port to the final destination. Reimburse the buyer related to securing information or documentation, in-
the ship at the port of shipment (not destination), within for buyers costs related to securing information and docu- cluding security information, that the buyer requires for
the agreed-upon time stipulated in the sales contract. mentation, including security information the seller re- import formalities, security clearance, and transport of
6. CostsPay all costs until the goods have been deliv- quires for export formalities, transport, security clearance, the goods to the final destination.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


ered on board the ship at the port of shipment. Pay all and transshipment to the named port of destination. Timely provide the seller, at the sellers request and cost,
costs of loading and carriage to the named port of Buyers Responsibilities (summary) with any documents and information required for ex-
destination. Pay for costs of unloading if unloading is port, transport, and security clearance of the goods to the
1. PaymentPay for the goods as provided in the sales
included in the contract for main carriage. Pay all named port of destination.
contract.
costs relating to export, including customs formali-
15
SELLER BUYER
16

CIF
Cost, Insurance, and Freight (. . . named port of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Sea or Inland Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Waterway Only Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

CIF, Cost, Insurance, and Freight (. . . named port of destination)


In Cost, Insurance, and Freight, the seller/exporter/manufac- With CIF, the seller has the option to deliver the goods on modity cargo such as oil, grains, and ore, b) oversize and over-
turer clears the goods for export and delivers them on board board the vessel, or to procure goods already so deliv- weight cargo that will not fit into an ocean container, and c)
the ship at the port of shipment (not destination). This is ered. This is a reference to so-called string sales cargo that exceeds the weight limitations of ocean containers.
where risk passes from seller to buyer. where a single shipment might be resold multiple times
Examples
The seller, however, is responsible for contracting for and during transport, as is common in the commodity trade. CIF, Terminal 2, Port of Oakland, California, USA
paying the costs associated with transport of the goods and The named destination in CIF is a port, and therefore the CIF, ABC Terminal, Port of Tokyo, Japan
minimum cover insurance to the named port of destina- term is used only for ocean or inland waterway transport.
tion. This is where costs transfer from seller to buyer. If the shipment is containerized or to be containerized, Modes of Transport
It is important to note that the transfer of risk from seller to common practice is to deliver the shipment to the carrier AirNo

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


buyer occurs at a different point than the transfer of costs. at a terminal and not on board a ship. In such situations, RailNo
When using the CIF term, it is advisable to clearly specify the CIP term is recommended. RoadNo
in the contract of sale and in contracts of carriage, not only With CIF, the named port of destination is domestic to SeaYes
the named port of destination, but also the precise point at the buyer. Inland WaterwayYes
or within the named port of destination. The CIF term is commonly used in the sale of a) bulk com- MultimodalNo
World Trade Press Illustrated Guide to Incoterms 2010
CIF
Cost, Insurance and Freight (. . . named port of destination)
Incoterm Category on board the ship at the port of shipment. Pay all costs of Buyers Responsibilities (summary)
CIF is a C term specifying that the seller is responsible loading and carriage to the named port of destination. Pay 1. PaymentPay for the goods as per sales contract.
for delivering the goods on board the ship at the port of for the cost of insurance as described in #3 above. Pay for 2. Licenses, Security, and Customs Formalities
shipment, and contracting and paying for carriage and in- costs of unloading if unloading is included in the contract Obtain any import licenses or authorizations and han-
surance to the named port of destination. C terms evi- for main carriage. Pay all costs relating to export, includ- dle all import customs formalities.
dence shipment (as opposed to arrival) contracts. ing customs formalities, duties, and taxes, as well as costs 3. Carriage and InsuranceBuyer has no obligation
Note: Documents may be paper or electronic, as custom- required for transshipment through any country up to the to seller.
ary or as agreed to by the parties to the transaction. named port of destination. 4. Taking DeliveryTake delivery of the goods at the
7. Notice to the BuyerProvide notice that enables named port of destination as provided in the contract.
Modes of Transport Covered
the buyer to take timely possession of the goods at the 5. Risk TransferAssume all risk of loss or damage
All modes of transport including multimodal.
named port of destination. from the time the goods have been delivered on board
Sellers Responsibilities (summary) 8. Delivery and Transport DocumentsProvide the the ship at the port of shipment (not destination).
1. GoodsProvide the goods, commercial invoice, and buyer with a transport document, dated within the period 6. CostsPay any additional costs for the goods, other than
other documentation as required by the sales contract. agreed, that allows the buyer to claim the goods at the main carriage, once they have been delivered on board the
2. Licenses, Security, and Customs Formalities named port of destination and (unless otherwise agreed) ship at the port of shipment. Pay costs of unloading, light-
Obtain at own risk and cost all export licenses, docu- allows the buyer to sell the goods while in transit through erage, and wharfage at the port of destination unless such
ments, and authorizations and carry out export formali- the transfer of the document or by notification to the sea costs were to be paid by seller under sellers contract for
ties and procedures. carrier. If a negotiable transport document is issued, a full carriage. Pay all costs relating to import formalities, duties,
3. Carriage and InsuranceContract or procure a set of originals must be given to the buyer. fees, and taxes. Pay costs of onward carriage.
contract for the carriage of the goods from the point 9. Checking, Packing, MarkingPay all costs associ- 7. Notice to SellerIf, according to the sales contract,
World Trade Press Illustrated Guide to Incoterms 2010

of delivery to the named port of destination. Obtain ated with checking the quality and quantity of the goods the buyer is entitled to specify a time for shipping or
and pay for minimum cover cargo insurance (Institute to be in conformity with the sales contract. Provide pre- the point of receiving the shipment at the named port
Cargo Clauses, Clause C coverage) from a reputable in- shipment inspections as required for export formalities. of destination, to give seller sufficient notice.
surance company or underwriter. Insurance must provide Package the goods, unless the goods are conventionally 8. Proof of DeliveryAccept the sellers delivery doc-
coverage at least to the named port of destination, entitle sold unpackaged. Package the goods as the seller deems ument if it is in conformity with the sales contract.
the buyer to make a claim directly to the insurer, be for a appropriate for transport, unless the buyer has given spe- 9. Inspection(s)Pay for pre-shipment inspections un-
minimum of 110% of the contract amount, and be in the cific requirements prior to the finalization of the sales less such is required by the country of export.
currency of the sales contract. Provide the buyer with an contract. Provide marking appropriate to the packaging. 10. OtherTimely advise the seller of any security-related
insurance policy or evidence of insurance. Provide infor- 10. OtherTimely provide the buyer, at the buyers request data requirements. Reimburse the seller for sellers costs
mation to enable the buyer to obtain additional insurance. and cost, assistance in securing information and docu- related to securing information or documentation, in-
4. DeliveryDeliver the goods on board the ship at the ments, including security information, required by the cluding security information, that the buyer requires for
port of shipment or procure goods already so delivered.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


buyer for import and transport of the goods from the import formalities, security clearance, and transport of
5. Risk TransferAssume all risks of loss or damage named port to the final destination. Reimburse the buyer the goods to the final destination.
to the goods until they have been delivered on board for buyers costs related to securing information and docu- Timely provide the seller, at the sellers request and cost,
the ship at the port of shipment (not destination), within mentation, including security information the seller re- with any documents and information required for ex-
the agreed-upon time stipulated in the sales contract. quires for export formalities, transport, security clearance, port, transport, and security clearance of the goods to the
17

6. CostsPay all costs until the goods have been delivered and transshipment to the named port of destination. named port of destination.
18

CPT SELLER BUYER

Carriage Paid To (. . . named place of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

CPT, Carriage Paid To (. . . named place of destination)


In Carriage Paid To, the seller/exporter/manufacturer point at or within the named place of destination. Examples
clears the goods for export and is responsible for deliver- The CPT term may be used for any mode of transport in- CPT, ABC Rail Terminal, Madrid, Spain
ing the goods to the carrier at an agreed-upon place of cluding multimodal. CPT, XYZ Barge Terminal, Frankfurt AM, Germany
shipment (not the destination). This is where risk passes In CPT, the named place of destination is domestic to the Modes of Transport
from seller to buyer. buyer. AirYes
The seller, however, is responsible for contracting for and The CPT term is often used in sales where the shipment
paying the costs associated with transport of the goods to the RailYes
is by air freight, containerized ocean freight, courier ship- RoadYes
named place of destination. This is where costs transfer ments of small parcels, and in ro-ro (roll-on, roll-off)
from seller to buyer. shipments of motor vehicles. SeaYes

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


It is important to note that the transfer of risk from seller to If more than one carrier is used for carriage to the named Inland WaterwayYes
buyer occurs at a different point than the transfer of costs. place of destination, such as in multimodal shipments, the MultimodalYes
When using the CPT term, it is advisable to clearly spec- risk passes when the goods have been delivered to the first
ify in the contract of sale and in contracts of carriage, not carrier.
only the named place of destination, but also the precise
World Trade Press Illustrated Guide to Incoterms 2010
CPT
Carriage Paid To (. . . named place of destination)
Incoterm Category well as costs required for transshipment through any 2. Licenses, Security, and Customs Formalities
Carriage Paid To is a C term specifying that the seller is country up to the named place of destination. Obtain any import licenses or authorizations and han-
responsible for contracting and paying for carriage to the 7. Notice to the BuyerProvide timely notice that the dle all import formalities.
named place of destination. goods have been delivered to the (first) carrier and 3. Carriage and InsuranceThe buyer has no obli-
C terms evidence shipment (as opposed to arrival) notice that enables the buyer to take timely posses- gation to seller for carriage or insurance.
contracts. sion of the goods at the named place of destination. 4. Taking DeliveryTake delivery of the goods at the
Note: Documents may be paper or electronic, as custom- 8. Delivery and Transport DocumentsProvide the named place of destination as provided in the contract.
ary or as agreed to by the parties to the transaction. buyer with a transport document, dated within the period 5. Risk TransferAssume all risk of loss or damage
agreed, that allows the buyer to claim the goods at the from the time the goods have been delivered to the
Modes of Transport Covered
named place of destination and (unless otherwise agreed) (first) carrier at the place of shipment.
All modes of transport including multimodal.
allows the buyer to sell the goods while in transit through 6. CostsPay costs other than main carriage after the
Sellers Responsibilities (summary) the transfer of the document or by notification to the sea goods have been delivered to the (first) carrier at the
1. GoodsProvide the goods, commercial invoice, and carrier. If a negotiable transport document is issued, a full place of shipment. Such costs include unloading, lighter-
other documentation as required by the sales contract. set of originals must be given to the buyer. age, and wharfage at the place of destination unless such
2. Licenses, Security, and Customs Formalities 9. Checking, Packing, MarkingPay all costs associ- costs were to be paid by seller under sellers contract for
Obtain at own risk and cost all required export licenses, ated with checking the quality and quantity of the goods carriage. Pay all costs relating to import formalities, du-
documents, and authorizations and carry out export for- to be in conformity with the sales contract. Provide pre- ties, fees, and taxes. Pay costs of onward carriage.
malities and procedures as well as those required for shipment inspections as required for export formalities. 7. Notice to SellerIf, according to the sales contract,
transshipment through any country prior to delivery. Package the goods, unless the goods are conventionally the buyer is entitled to specify a time or point of tak-
World Trade Press Illustrated Guide to Incoterms 2010

3. Carriage and InsuranceContract or procure a sold unpackaged. Package the goods as the seller deems ing delivery at the named place of destination, to give
contract for the carriage of the goods from the point appropriate for transport, unless the buyer has given spe- seller sufficient notice.
of delivery to the named place of destination. cific requirements prior to the finalization of the sales 8. Proof of DeliveryAccept the sellers delivery doc-
No obligation to provide insurance. Provide information contract. Provide marking appropriate to the packaging. ument if it is in conformity with the sales contract.
to enable the buyer to obtain insurance. 10. OtherTimely provide the buyer, at the buyers request 9. Inspection(s)Pay for pre-shipment inspections un-
4. DeliveryDeliver the goods to the (first) carrier at the and cost, assistance in securing information and docu- less such is required by the country of export.
named place of shipment (not place of destination). ments, including security information, required by the 10. OtherTimely advise the seller of any security-related
5. Risk TransferAssume all risks of loss or damage buyer for import and transport of the goods from the data requirements. Reimburse the seller for sellers costs
to the goods until they have been delivered to the named place to the final destination. Reimburse the buyer related to securing information or documentation, in-
(first) carrier at the place of shipment, within the for buyers costs related to securing information and docu- cluding security information, that the buyer requires for
agreed-upon time stipulated in the sales contract. mentation, including security information the seller re- import formalities, security clearance, and transport of
6. CostsPay all costs until the goods have been delivered quires for export formalities, transport, security clearance, the goods to the final destination.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


to the (first) carrier at the named place of shipment. Pay all and transshipment to the named place of destination. Timely provide the seller, at the sellers request and cost,
costs of loading and carriage to the named place of desti- Buyers Responsibilities (summary) with any documents and information required for ex-
nation. Pay costs of unloading if unloading is included in port, transport, and security clearance of the goods to the
1. PaymentPay for the goods as provided in the sales
the contract for main carriage. Pay all costs relating to ex- named place of destination.
contract.
port, including customs formalities, duties, and taxes, as
19
20

CIP SELLER BUYER

Carriage and Insurance Paid To (. . . named place of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

CIP, Carriage and Insurance Paid To (. . . named place of destination)


In Carriage and Insurance Paid To, the seller/exporter/ point at or within the named place of destination. Examples
manufacturer clears the goods for export and is responsible The CIP term may be used for any mode of transport in- CIP, ABC Rail Terminal, Siding C, Madrid, Spain
for delivering the goods to the carrier at an agreed-upon cluding multimodal. CIP, XYZ Barge Terminal, Dock A, Frankfurt AM, Germany
place of shipment (not the destination). This is where risk In CIP, the named place of destination is domestic to the Modes of Transport
passes from seller to buyer. buyer. AirYes
The seller, however, is responsible for contracting for and The CIP term is often used in sales where the shipment is RailYes
paying the costs associated with transport of the goods and by air freight, containerized ocean freight, courier ship- RoadYes
minimum cover insurance to the named place of destina- ments of small parcels, and in ro-ro (roll-on, roll-off) SeaYes
tion. This is where costs transfer from seller to buyer. shipments of motor vehicles. Inland WaterwayYes

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


It is important to note that the transfer of risk from seller to If more than one carrier is used for carriage to the named MultimodalYes
buyer occurs at a different point than the transfer of costs. place of destination, such as in multimodal shipments, the
When using the CIP term, it is advisable to clearly spec- risk passes when the goods have been delivered to the first
ify in the contract of sale and in contracts of carriage, not carrier.
only the named place of destination, but also the precise
World Trade Press Illustrated Guide to Incoterms 2010
CIP
Carriage and Insurance Paid To (. . . named place of destination)
Incoterm Category to the (first) carrier at the named place of shipment. Pay all Buyers Responsibilities (summary)
Carriage and Insurance Paid To is a C term specifying costs of loading and carriage to the named place of desti- 1. PaymentPay for the goods as provided in the sales
that the seller is responsible for contracting and paying for nation. Pay for insurance as described in #3 above. Pay contract.
carriage and insurance to the named place of destination. costs of unloading if unloading is included in the contract 2. Licenses, Security, and Customs Formalities
C terms evidence shipment (as opposed to arrival) for main carriage. Pay all costs relating to export, includ- Obtain any import licenses or authorizations and han-
contracts. ing customs formalities, duties, taxes, as well as costs re- dle all import formalities.
Note: Documents may be paper or electronic, as custom- quired for transshipment through any country up to the 3. Carriage and InsuranceNo obligation to seller.
ary or as agreed to by the parties to the transaction. named place of destination. 4. Taking DeliveryTake delivery of the goods at the
7. Notice to the BuyerProvide timely notice that the named place of destination as provided in the contract.
Modes of Transport Covered
goods have been delivered to the (first) carrier and 5. Risk TransferAssume all risk of loss or damage
All modes of transport including multimodal.
notice that enables the buyer to take timely posses- from the time the goods have been delivered to the
Sellers Responsibilities (summary) sion of the goods at the named place of destination. (first) carrier at the place of shipment.
1. GoodsProvide the goods, commercial invoice, and 8. Delivery and Transport DocumentsProvide the 6. CostsPay any additional costs for the goods, other
other documentation as required by the sales contract. buyer with a transport document, dated within the period than main carriage, once they have been delivered to the
2. Licenses, Security, and Customs Formalities agreed, that allows the buyer to claim the goods at the (first) carrier at the place of shipment. Such costs include
Obtain at own risk and cost all required export licenses, named place of destination and (unless otherwise agreed) unloading, lighterage, and wharfage at the place of desti-
documents, and authorizations and carry out export for- allows the buyer to sell the goods while in transit through nation unless such costs were to be paid by seller under
malities and procedures as well as those required for the transfer of the document or by notification to the sea sellers contract for carriage. Pay all costs relating to im-
transshipment through any country prior to delivery. carrier. If a negotiable transport document is issued, a full port formalities, duties, fees, and taxes. Pay costs of on-
3. Carriage and InsuranceContract or procure a set of originals must be given to the buyer. ward carriage.
World Trade Press Illustrated Guide to Incoterms 2010

contract for the carriage of the goods from the point 9. Checking, Packing, MarkingPay all costs associ- 7. Notice to SellerIf, according to the sales contract,
of delivery to the named place of destination. Obtain ated with checking the quality and quantity of the goods the buyer is entitled to specify a time or point of tak-
and pay for minimum cover cargo insurance (Institute to be in conformity with the sales contract. Provide pre- ing delivery at the named place of destination, to give
Cargo Clauses, Clause C coverage) from a reputable in- shipment inspections as required for export formalities. seller sufficient notice.
surance company or underwriter. Insurance must provide Package the goods, unless the goods are conventionally 8. Proof of DeliveryAccept the sellers delivery doc-
coverage at least to the named place of destination, entitle sold unpackaged. Package the goods as the seller deems ument if it is in conformity with the sales contract.
the buyer to make a claim directly to the insurer, be for a appropriate for transport, unless the buyer has given spe- 9. Inspection(s)Pay for pre-shipment inspections un-
minimum of 110% of the contract amount, and be in the cific requirements prior to the finalization of the sales less such is required by the country of export.
currency of the sales contract. Provide the buyer with an contract. Provide marking appropriate to the packaging. 10. OtherTimely advise the seller of any security-related
insurance policy or evidence of insurance. Provide infor- 10. OtherTimely provide the buyer, at the buyers request data requirements. Reimburse the seller for sellers costs
mation to enable the buyer to obtain additional insurance. and cost, assistance in securing information and docu- related to securing information or documentation, in-
4. DeliveryDeliver the goods to the (first) carrier at the ments, including security information, required by the cluding security information, that the buyer requires for

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


named place of shipment (not place of destination). buyer for import and transport of the goods from the import formalities, security clearance, and transport of
5. Risk TransferAssume all risks of loss or damage named place to the final destination. Reimburse the buyer the goods to the final destination.
to the goods until they have been delivered to the for buyers costs related to securing information and docu- At the sellers request and cost, provide the seller with
(first) carrier at the place of shipment, within the mentation, including security information the seller re- any documents and information required for export,
agreed-upon time stipulated in the sales contract. quires for export formalities, transport, security clearance, transport, and security clearance of the goods to the
21

6. CostsPay all costs until the goods have been delivered and transshipment to the named place of destination. named place of destination.
SELLER BUYER
22

DAT
Delivered At Terminal (. . . named terminal at port or place of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

DAT, Delivered At Terminal (. . . named terminal at port or place of destination)


In Delivered At Terminal, the seller/exporter/manufac- tion is domestic to the buyer. Modes of Transport
turer clears the goods for export and is responsible for The DAT term may be used for any mode of transport in- AirYes
their delivery to the named terminal at port or place of cluding multimodal. RailYes
destination. All forms of payment are used in DAT transactions. RoadYes
In DAT, the seller makes the goods available to the buyer The DAT term is ideal for multimodal transport. SeaYes
unloaded from the arriving means of transport. DAT is the only term under which the seller is responsi- Inland WaterwayYes
The terminal can be of any sort: a sea, road, air, or rail ter- ble for unloading. MultimodalYes
minal; a warehouse, a quay, or container yard; and cov-
ered or uncovered. Examples

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


When using the DAT term, it is advisable to clearly specify DAT, Terminal XYZ, Charles de Gaulle Airport, Paris,
in the contract of sale and in contracts of carriage, not only France
the terminal by name, but also the precise point at or within DAT, Sea Terminal ABC, Port of New York, USA
the terminal at the named port or place of destination.
World Trade Press Illustrated Guide to Incoterms 2010

In DAT, the named terminal at port or place of destina-


DAT
Delivered At Terminal (. . . named terminal at port or place of destination)
Incoterm Category available to the buyer, unloaded from the arriving 2. Licenses, Security, and Customs Formalities
Delivered At Terminal is a D term specifying that the means of transport, at the named terminal at port or Obtain any import licenses or authorizations and han-
seller is responsible for all costs associated with deliver- place of destination. Pay all costs relating to export, dle all import formalities.
ing the goods to the named terminal at the port or place including export customs formalities, duties, fees, and 3. Carriage and InsuranceBuyer has no obligation
of destination, excluding import customs formalities, du- taxes, as well as those required for transshipment to the seller for contracts of carriage or insurance.
ties, fees, and taxes. through any country prior to delivery. Pay all costs of 4. Taking DeliveryTake delivery of the goods at the
D terms evidence arrival (as opposed to shipment) loading and carriage to the place of destination. Pay named terminal at port or place of destination, as pro-
contracts. for costs of unloading the goods at terminal. vided in the sales contract.
Note: Documents may be paper or electronic, as custom- 7. Notice to the BuyerProvide timely notice that en- 5. Risk TransferAssume risk of loss or damage
ary or as agreed to by the parties to the transaction. ables the buyer to take possession of the goods at the from the time the goods have been made available,
named terminal at port or place of destination, within the unloaded, at the named terminal at the port or place of
Modes of Transport Covered
agreed-upon time. destination, within the agreed-upon time.
All modes of transport including multimodal.
8. Delivery and Transport DocumentsProvide the 6. CostsPay any additional costs after the goods have
Sellers Responsibilities (summary) buyer with a document that will allow the buyer to been made available at the named terminal at port or
1. GoodsProvide the goods, commercial invoice, and claim the goods at the named terminal. place of destination, within the agreed-upon time.
other documentation as required by the sales contract. 9. Checking, Packing, MarkingPay all costs associ- Pay costs of import customs formalities, duties, fees,
2. Licenses, Security, and Customs Formalities ated with checking the quality and quantity of the goods and taxes. Pay costs of onward carriage.
Obtain at own risk and cost all required export licenses, to be in conformity with the sales contract. Provide pre- 7. Notice to SellerIf, according to the sales contract,
documents, and authorizations and carry out export for- shipment inspections as required for export formalities. the buyer is entitled to specify a time or point of tak-
malities and procedures as well as those required for Package the goods, unless the goods are conventionally ing delivery at the named place of destination, to give
World Trade Press Illustrated Guide to Incoterms 2010

transshipment through any country prior to delivery. sold unpackaged. Package the goods as the seller deems seller sufficient notice.
3. Carriage and InsuranceContract and pay for the appropriate for transport, unless the buyer has given spe- 8. Proof of DeliveryAccept the sellers delivery doc-
carriage of the goods to the named terminal at port or cific requirements prior to the finalization of the sales ument if it is in conformity with the sales contract.
place of destination. No obligation to the buyer to se- contract. Provide marking appropriate to the packaging. 9. Inspection(s)Pay for pre-shipment inspections un-
cure a contract of insurance. At the buyers request 10. OtherTimely provide the buyer, at the buyers re- less such is required by the country of export.
and cost, provide information to enable the buyer to quest and cost, assistance in securing information and 10. OtherTimely advise the seller of any security-re-
obtain insurance. documents, including security information, required lated data requirements. Reimburse the seller for
4. DeliveryMake the goods available to the buyer, by the buyer for import and transport of the goods sellers costs related to securing information or docu-
unloaded from the arriving means of transport, at the from the named terminal to the final destination. mentation, including security information, that the
named terminal at port or place of destination, within Reimburse the buyer for buyers costs related to se- buyer requires for import formalities, security clear-
the agreed-upon time. curing information and documentation, including se- ance, and transport of the goods to the final destina-
5. Risk TransferAssume all risks of loss or damage curity information, the seller requires for export tion.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


to the goods until they have been made available to formalities, transport, security clearance, and trans- Timely provide the seller, at the sellers request and cost,
the buyer, unloaded from the arriving means of trans- shipment to the named terminal. with any documents and information required for ex-
port, at the named terminal at port or place of destina- Buyers Responsibilities (summary) port, transport, and security clearance of the goods to the
tion, within the agreed-upon time. 1. PaymentPay for the goods as provided in the sales named terminal at port or place of destination.
23

6. CostsPay all costs until the goods have been made contract.
24

DAP SELLER BUYER

Delivered At Place (. . . named place of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

DAP, Delivered At Place (. . . named place of destination)


In Delivered At Place, the seller/exporter/manufacturer The DAP term may be used for any mode of transport in- Modes of Transport
clears the goods for export and is responsible for their de- cluding multimodal. AirYes
livery to the named place of destination. All forms of payment are used in DAP transactions. RailYes
In DAP, the seller makes the goods available to the buyer The DAP term is ideal for multimodal transport. RoadYes
on the arriving means of transport at the named place of All forms of payment are used in DAP transactions. SeaYes
destination, not unloaded. Inland WaterwayYes
When using the DAP term, it is advisable to clearly spec- Examples MultimodalYes
ify in the contract of sale and in contracts of carriage, not DAP, Shanghai Free Trade Zone, Terminal 1, Shanghai,
only the named place of destination, but also the precise China

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


point at or within the named place of destination. DAP, Customs Warehouse, Port of Stockholm, Sweden
In DAP, the named place of destination is domestic to the
buyer and is often the buyers place of business.
In DAP, the seller is not responsible for import customs
formalities, duties, fees, or taxes.
World Trade Press Illustrated Guide to Incoterms 2010
DAP
Delivered At Place (. . . named place of destination)
Incoterm Category means of transport, at the named place of destination. 2. Licenses, Security, and Customs Formalities
Delivered At Place is a D term specifying that the seller Pay all costs relating to export, including export customs Obtain any import licenses or authorizations and han-
is responsible for all costs associated with delivering the formalities, duties, fees, and taxes, as well as those re- dle all import formalities.
goods to the named place of destination, excluding im- quired for transshipment through any country prior to 3. Carriage and InsuranceBuyer has no obligation
port customs formalities, duties, fees, and taxes. delivery. Pay all costs of loading and carriage to the to the seller for contracts of carriage or insurance.
D terms evidence arrival (as opposed to shipment) place of destination. Pay for costs of unloading if un- 4. Taking DeliveryTake delivery of the goods at the
contracts. loading is included in the contract for main carriage. named place of destination as provided in the contract.
Note: Documents may be paper or electronic, as custom- 7. Notice to the BuyerProvide timely notice that en- 5. Risk TransferAssume risk of loss or damage
ary or as agreed to by the parties to the transaction. ables the buyer to take possession of the goods at the from the time the goods have been made available at
named place of destination, within the agreed-upon time. the named place of destination, within the agreed-
Modes of Transport Covered
8. Delivery and Transport DocumentsProvide the upon time.
All modes of transport including multimodal.
buyer with a document that will allow the buyer to 6. CostsPay any additional costs after the goods have
Sellers Responsibilities (summary) claim the goods at the named place of destination. been made available at the named place of destination
1. GoodsProvide the goods, commercial invoice, and 9. Checking, Packing, MarkingPay all costs associ- within the agreed-upon time. Pay for costs of unloading
other documentation as required by the sales contract. ated with checking the quality and quantity of the goods if unloading was not included in the sellers original con-
2. Licenses, Security, and Customs Formalities to be in conformity with the sales contract. Provide pre- tract for carriage. Pay costs of import customs formali-
Obtain at own risk and cost all required export li- shipment inspections as required for export formalities. ties, duties, fees, and taxes. Pay costs of onward carriage.
censes, documents, and authorizations and carry out Package the goods, unless the goods are conventionally 7. Notice to SellerIf, according to the sales contract,
export formalities and procedures as well as those sold unpackaged. Package the goods as the seller deems the buyer is entitled to specify a time or point of tak-
World Trade Press Illustrated Guide to Incoterms 2010

required for transshipment through any country appropriate for transport unless the buyer has given spe- ing delivery at the named place of destination, to give
prior to delivery. cific requirements prior to the finalization of the sales seller sufficient notice.
3. Carriage and InsuranceContract and pay for the contract. Provide marking appropriate to the packaging. 8. Proof of DeliveryAccept the sellers delivery doc-
carriage of the goods to the named place of destina- 10. OtherTimely provide the buyer, at the buyers re- ument if it is in conformity with the sales contract.
tion. No obligation to the buyer to secure a contract of quest and cost, assistance in securing information and 9. Inspection(s)Pay for pre-shipment inspections un-
insurance. At buyers request and cost, provide infor- documents, including security information, required by less such is required by the country of export.
mation to enable the buyer to obtain insurance. the buyer for import and transport of the goods from 10. OtherTimely advise the seller of any security-re-
4. DeliveryMake the goods available to the buyer, not the named place of destination to the final destination. lated data requirements. Reimburse the seller for
unloaded, from the arriving means of transport, at the Reimburse the buyer for buyers costs related to se- sellers costs related to securing information or docu-
named place of destination, within the agreed-upon time. curing information and documentation, including se- mentation, including security information, that the
5. Risk TransferAssume all risks of loss or damage curity information, the seller requires for export buyer requires for import formalities, security clear-
to the goods until they have been made available to formalities, transport, security clearance, and trans- ance, and transport of the goods to the final destina-

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


the buyer, not unloaded, from the arriving means of shipment to the named place of destination. tion.
transport, at the named place of destination, within Buyers Responsibilities (summary) At the sellers request and cost, timely provide the
the agreed-upon time. seller with any documents and information required
1. PaymentPay for the goods as provided in the sales
6. CostsPay all costs until the goods have been made for export, transport, and security clearance of the
contract.
available to the buyer, not unloaded from the arriving goods to the named place of destination.
25
26

DDP SELLER BUYER

Delivered Duty Paid (. . . named place of destination)

Seller/ Export Pre-Carriage Delivery Loading at Named Loaded Transport by On Board Discharging Delivery at Onward Import Buyer/
Exporter Documents, to Named at Named Place/Port On Board Air, Rail, Road, Ship or (unloading) at Named Place/ Carriage to Documents, Importer
Named Place Formalities, Place, Not Place/Port, of Shipment Ship or Water, or Vessel, Not Named Place/Port Terminal Named Place, Formalities, Named Place,
and Fees Unloaded Unloaded Vessel Multimodal Unloaded of Destination Not Unloaded and Duties Unloaded
CARRIAGE

RISKS

COSTS

DDP, Delivered Duty Paid (. . . named place of destination)


In Delivered Duty Paid, the seller/exporter/manufacturer In DDP, the named place of destination is domestic to the Modes of Transport
clears the goods for export and is responsible for their de- buyer and is often the buyers place of business. AirYes
livery to the named place of destination. The DDP term may be used for any mode of transport in- RailYes
In DDP, the seller also clears the goods for import in the cluding multimodal. RoadYes
country of destination and pays for all import customs The DDP term is ideal for multimodal transport. SeaYes
formalities, duties, fees, VAT (value added tax), and other All forms of payment are used in DDP transactions. Inland WaterwayYes
taxes. MultimodalYes
The DDP term places the greatest responsibility on the
In DPP, the seller makes the goods available to the buyer seller and the least responsibility on the buyer.
on the arriving means of transport at the named place of

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destination, not unloaded. Examples
When using the DDP term, it is advisable to clearly spec- DDP, Importer ABC Warehouse, Full Address, Chicago,
ify in the contract of sale and in contracts of carriage, not Illinois, USA
only the named place of destination, but also the precise DDP, Importer XYZ, Full Address, Paris, France
point at or within the named place of destination.
World Trade Press Illustrated Guide to Incoterms 2010
DDP
Delivered Duty Paid (. . . named place of destination)
Incoterm Category means of transport, at the named place of destination. 2. Licenses, Security, and Customs Formalities
Delivered Duty Paid is a D term specifying that the Pay all costs relating to export and import, including cus- Provide the seller, at the sellers request and cost, as-
seller is responsible for all costs associated with deliver- toms formalities, duties, fees, and taxes, as well as those sistance in securing licenses, documentation, and au-
ing the goods to the named place of destination, includ- required for transshipment through any country prior to thorizations required to import the goods.
ing import customs formalities, duties, fees, and taxes. delivery. Pay all costs of loading and carriage to the 3. Carriage and InsuranceNo obligation to the
D terms evidence arrival (as opposed to shipment) place of destination. Pay for costs of unloading if un- seller for contracts of carriage or insurance.
contracts. loading is included in the contract for main carriage. 4. Taking DeliveryTake delivery of the goods at the
Note: Documents may be paper or electronic, as custom- 7. Notice to the BuyerProvide timely notice that en- named place of destination as provided in the contract.
ary or as agreed to by the parties to the transaction. ables the buyer to take possession of the goods at the 5. Risk TransferAssume risk of loss or damage
named place of destination, within the agreed-upon time. from the time the goods have been made available at
Modes of Transport Covered
8. Delivery and Transport DocumentsProvide the the named place of destination, within the agreed-
All modes of transport including multimodal.
buyer with a document that will allow the buyer to upon time.
Sellers Responsibilities (summary) claim the goods at the named place of destination. 6. CostsPay any additional costs after the goods have
1. GoodsProvide the goods, commercial invoice, and 9. Checking, Packing, MarkingPay all costs associ- been made available at the named place of destination
other documentation as required by the sales contract. ated with checking the quality and quantity of the goods within the agreed-upon time. Pay for costs of unload-
2. Licenses, Security, and Customs Formalities to be in conformity with the sales contract. Provide in- ing if unloading was not included in the sellers origi-
Obtain at own risk and cost all required export and spections as required for export and import formalities. nal contract for carriage. Pay costs of onward carriage.
import licenses, documents, and authorizations and Package the goods, unless the goods are conventionally 7. Notice to SellerIf, according to the sales contract,
carry out export and import formalities and proce- sold unpackaged. Package the goods as the seller deems the buyer is entitled to specify a time or point of tak-
World Trade Press Illustrated Guide to Incoterms 2010

dures as well as those required for transshipment appropriate for transport unless the buyer has given spe- ing delivery at the named place of destination, to give
through any country prior to delivery. cific requirements prior to the finalization of the sales seller sufficient notice.
3. Carriage and InsuranceContract and pay for the contract. Provide marking appropriate to the packaging. 8. Proof of DeliveryAccept the sellers delivery doc-
carriage of the goods to the named place of destina- 10. OtherTimely provide the buyer, at the buyers re- ument if it is in conformity with the sales contract.
tion. No obligation to the buyer to secure a contract of quest and cost, assistance in securing information and 9. Inspection(s)No obligation to the seller for pre-
insurance. At the buyers request and cost, provide in- documents, including security information, required by shipment inspections required for export or import.
formation to enable the buyer to obtain insurance. the buyer for transport of the goods from the named 10. OtherTimely advise the seller of any security-re-
4. DeliveryMake the goods available to the buyer, not place of destination to the final destination. lated data requirements.
unloaded from the arriving means of transport, at the Reimburse the buyer for buyers costs related to securing Reimburse the seller for sellers costs related to secur-
named place of destination, within the agreed-upon time. information and documentation, including security in- ing information or documentation, including security
5. Risk TransferAssume all risks of loss or damage formation, required by the seller for export formalities, information, that the buyer requires for transport of
to the goods until they have been made available to transport, security clearance, import formalities, and the goods to the final destination.

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com


the buyer, not unloaded from the arriving means of transshipment to the named place of destination. At the sellers request and cost, timely provide the
transport, at the named place of destination, within Buyers Responsibilities (summary) seller with any documents and information required
the agreed-upon time. for export, transport, import, and security clearance of
1. PaymentPay for the goods as provided in the sales
6. CostsPay all costs until the goods have been made the goods to the named place of destination.
contract.
available to the buyer, not unloaded from the arriving
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