Incoterms 2023 chart pdf

How many incoterms are there in 2020. Incoterms 2023 chart pdf download. Incoterms 2023 chart pdf free download. 2020 incoterms explained.

If you are shipping goods, knowing your incoterms is essential to understanding who is responsible for what in your supply chain. Read on to learn all about incoterms and how to choose the right one for your shipment. Incoterms in Plain English: The Incoterms Guide for Freight Shipping What are Incoterms? Freight incoterms (International
Commercial Terms) are the standard terms used in sales contracts for importing and exporting. They are used to define responsibility and liability for goods over the course of a shipment. In other words, they spell out when responsibility for the goods transfers from the supplier to the buyer. They also define who pays which costs for the goods and
their transport.

Return to top How Incoterms Impact Your Shipping Cost You can use our freight rate calculator to help you decide how different incoterms will impact your freight cost.

For example, when shipping EXW, you’ll be responsible for the added cost of getting your goods from your supplier to the seaport or airport. Simply choose container, box, or pallet shipping, enter your dimensions and weight, and you’ll get an instant estimate of freight shipping costs. Types of Incoterms FOB (Free On Board), EXW (Ex Works) and
FCA (Free Carrier) are the most well-known incoterms but there are more to choose from. Which one is right for you depends on factors including what type of goods you’re shipping, your experience as a shipper, and your relationship with your supplier. Most incoterms can be used for any mode of transport. The exceptions are FOB, FAS, CFR, and
CIF, which are used for sea freight only. Return to top Incoterms for Air Freight Incoterms commonly used for air shipments are: EXW (Ex-works), in which the buyer assumes responsibility at the seller’s warehouse and takes care of everything including transportation and insurance. CIP (Carriage and insurance), which puts responsibility for
insurance on the seller. CPT (Carriage Paid To), in which the seller delivers the goods and covers all fees involved in delivering the goods to the named destination. After delivery, the buyer assumes responsibility. DDP (Delivered Duty Paid), which puts most obligations on the seller. They carry all the costs and risks of transport, insurance, and
customs clearance. This is the only incoterm that lists the seller as the importer of record at destination. DAP-Delivered At Place, where the seller covers the costs involved in main carriage but is not responsible for customs clearance. Return to top Importers and exporters should consider which incoterms is best for them before the contract of sale is
negotiated. This can prevent surprise costs and unnecessary complications. Choosing an incoterm means getting on the same page as your supplier – it aligns everyone on shipping procedures when multiple parties and stakeholders are involved. These globally accepted terms ensure the timely payment of goods, services, and duties, while protecting
suppliers, carriers, and buyers. Return to top Incoterms Chart, List & PDF Check out this quick reference of Incoterms and the breakdown of who is responsible for what at various points in the international supply chain. What Incoterms Should I Use? Here are some of the most common incoterms and when you might choose them: FOB (Free on
Board) This very common incoterm is for sea freight only, and means that liability and responsibility for cost transfer to the buyer when the goods are loaded “on board” the shipping vessel. FOB gives the buyer a high degree of control over the freight shipping process. Since the buyer is choosing their own forwarder, they benefit from greater
flexibility with regards to cost, terms, and shipping planning.
EXW (ExWorks) The ExWorks incoterm means that responsibility transfers to the buyer at the supplier’s warehouse and not on board the vessel. This means the buyer pays for and is responsible for goods’ transport every step of the way, from door to door. All the supplier needs to do is prepare the goods for pick up. This incoterm gives the buyer full
control over freight costs, but also means they are responsible for everything that happens in the origin country– which is frequently not their country of residence. More experienced shippers may benefit from using this incoterm. FCA (Free Carrier) When using FCA, the buyer assumes responsibility and costs once the goods are loaded onto a mode
of transportation or delivered to a specific location agreed upon by the buyer and seller – typically this is a port. This incoterm is used for all shipping modes. With FCA, the supplier is responsible for packaging and transport at the origin. This means the supplier has more responsibility than they do with ExWorks, but the buyer still assumes costs and
responsibilities earlier than they do when using FOB. Return to top Main Differences Specific to a Country The above advice covers most countries in most circumstances. But there are some factors to keep in mind when choosing an incoterm with your supplier: Customs procedures are much more relaxed at porous borders, like within the EU
Different countries require different produres and paperwork for shipments: the US requires a Customs Bond, importing into the UK requires a Deferment Account, and exporting from India includes a withholding tax. Return to top When to Challenge Advice Some freight forwarders prefer only using a favored set of incoterms because they “seem to
work.” Therefore don’t be surprised if some forwarders push back on your selection of incoterm, despite it being the most appropriate incoterm for your shipment. Return to top What Shipping Incoterms Don’t Cover Incoterms do not cover property rights, possible force majeure situations and breach of contract. Include of these within the contract of
sale. Similarly, all incoterms except the C terms do not assign responsibility for arranging insurance. Cargo insurance is, therefore, a separate cost for buyers. Return to top Define Named Place in the Sales Contract When the incoterm is written in the sales contract, the named place should immediately follow the three letter incoterm abbreviation,
e.g. “FCA Shenzen Yantian CFS.” Be precise when defining the location, especially with larger cities that may have several terminals, and with larger terminals that may have several drop-off points. You can use this global port finder to find specific port codes. Return to top How Letters of Credit Limit Choice of Incoterm If the sale is being completed
with a letter of credit or documentary credit, the chain that releases funds begins with the seller providing several documents to the bank, including the bill of lading/air waybill. Letters of credit are used where there is limited trust between the seller and the buyer. That rules out EXW, because the supplier will be paid before pickup. F terms require
trust because if the buyer cancels the international transit, the supplier won’t have a bill of lading to present to the bank. D terms require trust because the seller is bearing all of the transport costs. That leaves the four C terms as the best options to use with a letter of credit. Return to top Individual Incoterms
EXW | FCA | FAS | FOB | CPT | CIP | CFR | CIF | DPU | DAP | DDP Return to top Incoterms, short for International Commercial Terms, are a set of standardized trade terms businesses use globally to define the responsibilities of buyers and sellers in international trade transactions. They provide a common language for international trade, making it
easier for parties to understand each other’s obligations and reducing the risk of misunderstandings. These terms are developed and maintained by the International Chamber of Commerce (ICC) and are updated periodically to keep pace with changes in the global trade environment. The latest version, Incoterms 2023, was released in September
2022.

In this guide, we will take an in-depth look at Incoterms 2023 and how they are used in international trade. What are Incoterms? Incoterms are a set of 11 standardized terms that define the responsibilities of buyers and sellers in international trade transactions. Each Incoterm defines the responsibilities of the buyer and seller for the delivery of
goods, transportation, and insurance. For example, the Incoterm “FOB” (Free on Board) specifies the seller is responsible for delivering the goods to the port of shipment and loading them onto the shipping vessel, while the buyer is responsible for all costs and risks associated with transportation from that point onwards. Incoterms only define the
responsibilities for delivery of goods and do not cover other aspects of the sale, such as the price, payment terms, or quality of the goods. Why use Incoterms? Incoterms are used in international trade to minimize misunderstandings and reduce the risk of disputes between buyers and sellers. By using standardized terms, both parties can clearly
understand their obligations, reducing the risk of misunderstandings and disputes. Additionally, Incoterms provides a level of certainty to international trade transactions.

By using these terms, both parties can be sure that their rights and responsibilities are clearly defined, reducing the risk of confusion or disputes arising later in the transaction. A few of the most essential Incoterms for 2023 include: 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) DAT (Delivered at Terminal) DAP (Delivered at Place) DDP (Delivered Duty Paid) Understanding the key changes in Incoterms for 2023 Each Incoterm defines a different level of responsibility for the delivery of goods. While some Incoterms require the seller
to take on more responsibilities, others place more responsibility on the buyer. While the core elements of the previous versions have been retained, the following changes are worth noting: Definition of “Delivered at Place” (DAP): the definition of DAP has been modified to include deliveries to an inland clearance depot (ICD), which is a facility where
goods are cleared for import or export. This change reflects the increasing use of ICDs in international trade and helps to ensure that the responsibilities of the buyer and seller are clearly defined in these situations. Definition of “Delivered Duty Paid” (DDP): the definition of DDP has been clarified to articulate the seller is responsible for all costs and
risks associated with the delivery of goods, including customs clearance.
This change helps to ensure there is no confusion over who is responsible for customs-related costs and risks in international trade transactions.

Increased Focus on Sustainability: Incoterms 2023 places a greater emphasis on sustainability and the responsibility of buyers and sellers to act in an eco-friendly manner. This includes recommending both seller and buyer consider using more sustainable transportation options, such as rail or sea transport, instead of air freight. Simplification of
Definitions: the definitions of certain Incoterms have been simplified in Incoterms 2023 making them easier to understand to reduce the risk of confusion. This includes the clarification of certain terms, such as the responsibilities of the buyer and seller for loading and unloading goods. What do Incoterms not cover? Incoterms are generally
incorporated in the contract of sale, however they do not: address the conditions of sale identify the goods being sold list the contract price reference the method or due date of payment when title, or ownership of the goods, passes from the seller to the buyer specify which documents must be provided by the seller to the buyer to facilitate the
customs clearance process address liability for the failure to provide the goods How to use Incoterms 2020 on sales and purchasing contracts Although the new Incoterms® 2020 came into effect on January 1st, 2020, trading partners can still opt to use the Incoterms® 2010 if they prefer. However, in order to prevent misunderstandings, it’s
important for parties to clearly indicate in their Sales and Purchasing contracts which version of Incoterms® they are referring to.
Additionally, all contracts should be countersigned by both parties to ensure clarity and understanding. Before using Incoterms® 2020 in contracts, be sure to check existing contracts to confirm the inclusion of the Incoterms® edition year. If no year is stated, the following applies: Up to December 31st, 2019: Incoterms® 2010 From January 1st,
2020: Incoterms® 2020 If a different year is indicated, for example, Incoterms® 1990, the respective terms will apply. Navigating Incoterms can be a challenge and can even leave you feeling frustrated. That’s where the experts at Cargoline can help. With over 20 years of experience in importing regulated items for both buyers and sellers, we are
here to make the process seamless. From drafting the initial bill of lading to ensuring compliance through submitting all import documentation at ports worldwide, our team of customs clearance and brokerage specialists will help you stay compliant while saving you time and money. Contact a team member to learn more. We look forward to working
with you.