Chapter 2 - Incoterms 2020

7/9/2022
CHÖÔNG 1.
CAÙ C ÑIEÀU KIEÄN THÖÔNG MAÏI QUOÁC

CHAPTER 2
INCOTERMS
TEÁ 2020
(INCOTERMS)
GV : Ths. Traàn Thò Truùc Lan

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KEY CONTENTS
2.1. Who issues Incoterms?
2.2. How many groups Incoterms are divided?
2.3. How many rules are there in Incoterms 2020?
2.4. Explain each rule
2.5. Criteria to choose Incoterm when exporting
2.1. Who issues Incoterms?
Incoterms® are a set of rules which

define the responsibilities of sellers
and buyers for the delivery of goods
under sales contracts. They are
published by the International
Chamber of Commerce (ICC) and are
widely used in commercial
transactions.
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2.2. How many groups Incoterms is divided?
2.2.1. Rules for sea 2.2.2. Rules for any

and inland mode of transport.
waterway transport EXW
FAS FCA
FOB CPT
CFR CIP
CIF DAP
DPU
DDP
2.3. How many rules are there in Incoterms 2020?

There are 11 terms in Incoterms 2020
EXW - Ex Works
FCA - Free Carrier
FAS - Free Alongside Ship
FOB - Free On Board
CFR - Cost and Freight
CIF - Cost Insurance and Freight
CPT - Carriage Paid To
CIP - Carriage and Insurance Paid To
DAP - Delivered at Place
DPU - Delivered at Place Unloaded
DDP - Delivered Duty Paid 6
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2.4. Explain each rule: 6
2.4.1. EXW – Ex Works (Place of Delivery)
 Ex-works terms make the seller responsible to place the

goods at the disposal of the buyer at the seller’s premises or
any other named place.
 Delivery occurs when goods are placed for the buyer’s
disposal without necessarily to be loaded.
 EXW terms do not obligate the seller to clear exports or load
goods into the collecting vehicle.
2.4.1. EXW – Ex Works (Place of Delivery) 6

THE SELLER’S OBLIGATIONS THE BUYER’S OBLIGATIONS
1. General 1. General
The seller must deliver the goods, commercial invoice, and evidence of The buyer must pay the price of goods as agreed in the contract of sale
conformity
2. Delivery 2. Taking Delivery

Deliver the goods at the agreed point, date or period, not loaded on The buyer takes the goods after delivered and given notice received
vehicle from the seller
3. Risks 3. Risks
All risk of loss/damage until goods have been delivered All risk of loss/damage from the time or end of the period agreed for
delivery
4. Carriage 4. Carriage
No obligation to make a contract of carriage. Provide at buyers risk and Contract the carriage from the place of delivery
cost, information for arranging carriage
5. Insurance 5. Insurance
No obligation. Provide at buyers risk and cost, any required No obligation to insure the goods.
information.
6. Delivery/transport document 6. Delivery/transport document
No obligation. Provides evidence of taken delivery to the seller.
7. Export/Import clearance 7. Export/Import clearance

Assist the buyer (at buyers risk and cost) obtaining documents for Arrange and pay any documents for export/transit/import
export/transit/import.
8. Checking 8. Checking
The seller must check, count, weight and package goods No obligation.
9. Allocation of cost 9. Allocation of cost

Pay all the cost until delivery Pay from the time goods delivered. Reimburse cost to the seller for
assisting with information. Pay duties and taxes for export
10. Notices 10. Notices

Give notice so the buyer can take the delivery With sufficient notice, the buyer can agree on time and place of
delivery.
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2.4.2. FCA – Free Carrier (Place of Delivery) 6
 The seller must load goods into a transport vehicle

 If delivery takes place in a different place, the seller
is responsible for local transport from seller’s to
place of delivery (not unloading).
 The seller must clear customs for exports
2.4.2. FCA – Free Carrier (Place of Delivery)

THE SELLER’S OBLIGATIONS THE BUYER’S OBLIGATIONS 6
The seller must deliver the goods, commercial invoice, and evidence of The buyer must pay the price of goods as agreed in the contract of sale
conformity
Deliver the goods at the agreed point, date or period. If no time is notified, The buyer takes the goods after delivered in the agreed time.
when goods have been loaded or placed at disposal of the carrier
3. Risks 3. Risks
All risk of loss/damage until goods have been delivered All risk of loss/damage from the time or end of the period agreed for delivery. If
the buyer fails to nominate a carrier, or if the carrier doesn’t pick up the goods,
the risk is under the buyer.
No obligation to make a contract of carriage. Provide at buyers risk and cost, Contract the carriage from the place of delivery unless agreed with the seller.
information for arranging carriage. If agreed, the seller must contact the carrier.
No obligation. Provide at buyers risk and cost, any required information. No obligation to insure the goods.
Proof of delivery at sellers cost and a transport document if arranged by seller Accepts the proof of delivery. If agreed the buyer must instruct the carrier to
issue a transport document.
All export clearance expenses (license, security, inspection, etc). Assist with Assist with export clearance. Import clearance and formalities (licenses,
import clearance security, official documentation).
The seller must check, count, weight, mark, and package goods No obligation.
Pay all the cost until delivery. Cost of proof of delivery. Duties and taxes for Pay from the time goods delivered. All costs for assistance on getting carriage,
export. All costs related to providing assistance in obtaining documents to the insurance, delivery, and customs documentation. Pay duties and taxes for
buyer import or transit. Any additional cost if the carrier is not nominated or carrier
fails to collect goods.

Give notice that goods have been delivered or failed to be collected by carrier. Notify the carrier nominated, time or period, mode fo transportation and the
point where goods will be received.
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2.4.3. FAS – Free Alongside Ship (Port of Loading) 6
 The seller loads cargo to truck, clears the goods for

export and delivers them alongside side the vessel
nominated by the buyer at port of origin.
 This means that the seller is responsible for all costs
and risks to the goods up to quay of POL.
2.4.3. FAS – Free Alongside Ship (Port of Loading) 6

The seller must deliver the goods, commercial invoice, and evidence of The buyer must pay the price of goods as agreed.
conformity.
Deliver the goods at the agreed point alongside the vessel nominated by the The buyer takes the goods after delivered.
buyer, in the agreed date or period. If no time is notified, when goods have been
loaded or placed at the disposal of the carrier
3. Risks 3. Risks
the buyer fails to nominate a carrier, or if the carrier doesn’t arrive, the risk is
under the buyer.
No obligation to make a contract of carriage. Provide at buyers risk and cost, Contract the carriage from the place of delivery unless agreed the seller will
information for arranging carriage. If agreed, the seller must contract the carrier. contract the carrier.
Proof of delivery at sellers cost and a transport document if arranged by seller Accepts the proof of delivery
All export clearance expenses (license, security, inspection, etc). Assist with Assist with export clearance. Pay for import clearance and formalities (licenses,
Pay all the cost until delivery. Cost of proof of delivery. Duties and taxes for Pay from the time goods delivered. All costs for assistance on get carriage,

Give notice that goods have been delivered or the vessel failed to collect the Notify the vessel name, loading point and time or period.
goods.
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2.4.4. FOB – Free on Board (Port of Loading) 6
The seller must clear the goods for export and delivers
when the goods pass the ship’s rail at the agreed port
of loading.
2.4.4. FOB – Free on Board (Port of Loading) 6

The seller must deliver the goods, commercial invoice, and any evidence of The buyer must pay the price of goods as agreed.
conformity.
Deliver the goods by placing on board the vessel nominated by the buyer at the The buyer takes the goods after delivered.
loading point, in the agreed date or period. In a customary manner at the port
3. Risks 3. Risks
the buyer fails to nominate a carrier, or if the carrier doesn’t arrive, the risk is
under the buyer.
No obligation to make a contract of carriage. Provide at buyers risk and cost, Contract the carriage from the place of delivery unless agreed the seller will
information for arranging carriage. If agreed, the seller must contract the carrier. contract the carrier.
Proof of delivery at sellers cost and a transport document if arranged by seller Accepts the proof of delivery
Pay all the cost until delivery. Cost of proof of delivery. Duties and taxes for Pay from the time goods delivered. All costs for assistance on getting carriage,

Give notice that goods have been delivered or the vessel failed to collect the Notify the vessel name, loading point and time or period.
goods.
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2.4.5. CFR – Cost and Freight (named port of destination) 6
 The seller delivers when the goods are on board and

cleared for export. The seller pays for freight to
transport the goods until the final port of destination.
 However, the risk transfer occurs when goods are on
board.
2.4.5. CFR – Cost and Freight (named port of destination) 6

conformity.
Deliver the goods by placing on board the vessel in the agreed date or period. The buyer takes the goods from the carrier at the port of destination
In the customary manner at the port
3. Risks 3. Risks
All risk of loss/damage until goods have been delivered All risk of loss/damage from the time or end of the period agreed for delivery.
If the buyer fails to give note of the port of destination, the risk is under the
buyer.
Contract carriage of goods until port of destination. No obligation to contract a carrier.

Provide the usual transport document. Accepts the proof of delivery

Pay all the cost until delivery, freight cost, and loading cost. Unloading cost if Pay from the time goods delivered. All costs for assistance on getting carriage,
agreed in the contract. Transit costs. Cost of proof of delivery. Duties and taxes insurance, delivery, and customs documentation. Pay duties and taxes for
for export. All costs related to providing assistance in obtaining documents to import or transit. Any additional cost if the carrier is not nominated or carrier
the buyer fails to collect goods.

Give notice that goods have been delivered on board. Time or period for receiving the goods and name the port of destination.
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2.4.6. CIF – Cost, Insurance and Freight paid to (Port of Destination) 6
 The seller clears the goods at origin, places the cargo on board
and pays for insurance until the port of discharge at the
minimum coverage (C clause if the buyer doesn’t ask for
higher).
 The risk is transferred to the buyer at the time the goods are
on board.
2.4.6. CIF – Cost, Insurance and Freight paid to (Port of Destination) 6

conformity.
Deliver the goods by placing on board the vessel in the agreed date or period. The buyer takes the goods from the carrier at the port of destination
In a customary manner at the port
3. Risks 3. Risks
All risk of loss/damage until goods have been delivered All risk of loss/damage from the time or end of the period agreed for delivery.
If the buyer fails to give notice of the port of destination, the risk is under the
buyer.
Contract carriage of goods until port of destination. No obligation to contract a carrier.
The seller must obtain cargo insurance. Additional insurance coverage under No obligation to insure the goods.
the buyer account.
Provide the usual transport document. Accepts the proof of delivery

Pay all the cost until delivery, freight cost, and loading cost. Unloading cost if Pay from the time goods delivered. All costs for assistance on getting carriage,
agreed in the contract. Transit costs. Cost of proof of delivery. Insurance. delivery, and customs documentation. Pay duties and taxes for import or transit.
Duties and taxes for export. All costs related to providing assistance in Any additional cost if the carrier is not nominated or carrier fails to collect
obtaining documents to the buyer goods.

Give notice that goods have been delivered on board. Time or period for receiving the goods and name the port of destination.
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2.4.7. CPT – Carriage paid to (Place of Destination) 6
 The seller clears the goods for export, pays the main
carriage until the agreed named place of destination.
 The risk is transferred to the buyer when cargo is on
1st truck.
2.4.7. CPT – Carriage paid to (Place of Destination) 6

conformity.
Deliver the goods to the carrier on the agreed date or period. The buyer takes the goods from the carrier at the place of destination.
3. Risks 3. Risks
All risk of loss/damage until goods have been delivered. All risk of loss/damage from the time or end of the period agreed for delivery.
If the buyer fails to give notice of the port of destination, the risk is under the
buyer.
Contract carriage of goods until the place of destination. No obligation to contract a carrier.
No obligation insure the goods. No obligation to insure the goods.
Provide the usual transport document and dated within the agreed shipment Accepts the proof of delivery
period. Full set of originals if the document is negotiable.


Pay all the cost until delivery, freight cost, loading cost, and unloading. Transit Pay from the time goods delivered. Unloading cost not related to the contract of
costs. Cost of proof of delivery. Duties and taxes for export. All costs related to carriage. All costs for assistance on getting documents and information. Pay
providing assistance in obtaining documents to the buyer duties and taxes for import or transit. Any additional cost if the seller is not
notified about shipment date or period.

Give notice that goods have been delivered. Time or period for dispatching the goods and name the point of receiving the
goods.
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2.4.8. CIP – Carriage and Insurance paid to (Place of Destination) 6
 The seller clears the goods for export, pays the cost
of carriage, procure the maximum insurance (A
clause) until the named place of destination.
 The risk is passed when the goods are received by
the first carrier.
2.4.8. CIP – Carriage and Insurance paid to (Place of Destination) 6

conformity.
Deliver the goods to the carrier on the agreed date or period. The buyer takes the goods from the carrier at the place of destination or at the
point.
3. Risks 3. Risks
If the buyer fails to give notice of the place of destination, the risk is under the
buyer.
Insure the goods at maximum. No obligation to insure the goods.
Provide the usual transport document and dated within the agreed shipment Accepts the proof of delivery
period. Full set of originals if the document is negotiable.

Pay all the cost until delivery. Transport and loading. Unloading under the Pay from the time goods delivered. Transit cost not under sellers account.
contract of carriage. Transit costs. Cost of proof of delivery. Insurance. Duties Unloading cost not related to the contract of carriage. Additional insurance not
and taxes for export. All costs related to providing assistance in obtaining under the seller account. All costs for assistance. Pay duties and taxes for
documents to the buyer imports. Any additional cost if does not notify the shipment date or period.

Give notice that goods have been delivered. Time or period for dispatching the goods and name the point of receiving the
goods.
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2.4.9. DAP – Delivery at Place (Place of Destination) 6
 The sellers is responsible for moving the goods from

origin until their delivery at the disposal place agreed
with the buyer ready for unloading at destination.
 The seller bears the risk until delivery of goods to the
agreed delivery point.
2.4.9. DAP – Delivery at Place (Place of Destination) 6

conformity.
Deliver the goods at the disposal of the buyer, unloaded. On the agreed date or The buyer takes the goods at the destination point.
period.
3. Risks 3. Risks
If the buyer fails to clear import customs or notify time/period, the risk is under
the buyer.
No obligation. No obligation to insure the goods.
Provide documents that allow the buyer to take over the goods. Accepts the proof of delivery


Pay all the cost until delivery. Transport and loading. Unloading charges that Pay from the time goods delivered. Unloading. All costs for assistance. Pay
are under the contract of carriage only. Transit costs. Cost of delivery/transport duties and taxes for imports. Any additional cost if does not notify the shipment
document. Duties and taxes for export. All costs related to providing assistance date or period.
in obtaining documents to the buyer.

Give the notice to receive the goods. Time or period for receiving the goods and name the point of receiving the
goods.
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2.4.10. DPU – Delivery at Place Unloaded (Place of Destination) 6
 The seller is responsible for moving the goods from origin until
their delivery at the disposal place unloaded at destination.
 The seller bears the risk until delivery of goods to the agreed
delivery point.
2.4.10. DPU – Delivery at Place Unloaded (Place of Destination) 6

conformity.
Deliver the goods at the disposal of the buyer, unloaded. On the agreed date or The buyer takes the goods at the destination point.
period.
3. Risks 3. Risks
If the buyer fails to clear import customs or notify time/period, the risk is under
the buyer.


Pay all the cost until delivery. Transport and loading. Unloading charges. Pay from the time goods delivered. All costs for assistance. Pay duties and
Transit costs. Cost of delivery/transport document. Duties and taxes for export. taxes for imports. Any additional cost if does not notify the shipment date or
All costs related to providing assistance in obtaining documents to the buyer. period.

goods.
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2.4.11. DDP - Delivery Duty Paid (Place of Destination) 6
 The seller is responsible for all costs associated until the seller
delivers the goods to the buyer, cleared for import at the
named place of destination.
 In DDP the seller does not pay for unloading the goods.
2.4.11. DDP - Delivery Duty Paid (Place of Destination) 6

conformity.

Deliver the goods at the disposal of the buyer on the arriving vehicle, ready for The buyer takes the goods at the destination point.
unload. On the agreed date or period.
3. Risks 3. Risks
If the buyer fails to assist the import clearance, the risk is under the buyer.

All export and import clearance expenses (license, security, inspection, etc). Assist with import clearance.

Pay all the cost until delivery. Transport and loading. Unloading charges only if Pay from the time goods delivered. Any additional cost if does not notify the
related to the contract of carriage. Cost of delivery/transport document. Duties time for taking delivery or fails to assist the seller for import clearance.
and taxes for export and import.

goods.
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2.5. Criteria to choose Incoterms when exporting

 Company policy
 Bargaining position
 Freight purchasing power
 Just in time
 Market place tradition
 Mode of transport
 Legal & financial restriction
 Transport infrastructure
 Type of cargo
 Value of cargo 29
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Chapter 2 - Incoterms 2020

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7/9/2022

CAÙ C ÑIEÀU KIEÄN THÖÔNG MAÏI QUOÁC

GV : Ths. Traàn Thò Truùc Lan

2.1. Who issues Incoterms?

2.2. How many groups Incoterms are divided?

2.3. How many rules are there in Incoterms 2020?

2.4. Explain each rule

2.5. Criteria to choose Incoterm when exporting

2.1. Who issues Incoterms?

Incoterms® are a set of rules which

2.2. How many groups Incoterms is divided?

2.2.1. Rules for sea 2.2.2. Rules for any

2.3. How many rules are there in Incoterms 2020?

2.4. Explain each rule: 6

2.4.1. EXW – Ex Works (Place of Delivery)

 Ex-works terms make the seller responsible to place the

2.4.1. EXW – Ex Works (Place of Delivery) 6

2. Delivery 2. Taking Delivery

7. Export/Import clearance 7. Export/Import clearance

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.2. FCA – Free Carrier (Place of Delivery) 6

 The seller must load goods into a transport vehicle

2.4.2. FCA – Free Carrier (Place of Delivery)

10. Notices 10. Notices

2.4.3. FAS – Free Alongside Ship (Port of Loading) 6

 The seller loads cargo to truck, clears the goods for

2.4.3. FAS – Free Alongside Ship (Port of Loading) 6

10. Notices 10. Notices

2.4.4. FOB – Free on Board (Port of Loading) 6

2.4.4. FOB – Free on Board (Port of Loading) 6

10. Notices 10. Notices

2.4.5. CFR – Cost and Freight (named port of destination) 6

 The seller delivers when the goods are on board and

2.4.5. CFR – Cost and Freight (named port of destination) 6

6. Delivery/transport document 6. Delivery/transport document

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.6. CIF – Cost, Insurance and Freight paid to (Port of Destination) 6

2.4.6. CIF – Cost, Insurance and Freight paid to (Port of Destination) 6

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.7. CPT – Carriage paid to (Place of Destination) 6

2.4.7. CPT – Carriage paid to (Place of Destination) 6

7. Export/Import clearance 7. Export/Import clearance

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.8. CIP – Carriage and Insurance paid to (Place of Destination) 6

2.4.8. CIP – Carriage and Insurance paid to (Place of Destination) 6

7. Export/Import clearance 7. Export/Import clearance

10. Notices 10. Notices

2.4.9. DAP – Delivery at Place (Place of Destination) 6

 The sellers is responsible for moving the goods from

2.4.9. DAP – Delivery at Place (Place of Destination) 6

7. Export/Import clearance 7. Export/Import clearance

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.10. DPU – Delivery at Place Unloaded (Place of Destination) 6

2.4.10. DPU – Delivery at Place Unloaded (Place of Destination) 6

7. Export/Import clearance 7. Export/Import clearance

9. Allocation of cost 9. Allocation of cost

10. Notices 10. Notices

2.4.11. DDP - Delivery Duty Paid (Place of Destination) 6