International Commercial Terms 2010-

INCOTERMS

Logistics and International Marketing

Sandra Chicas Sierra
 INCOTERMS

The Incoterms® rules have become an essential part of

the daily language of trade. They have been
incorporated in contracts for the sale of goods
worldwide and provide rules and guidance to
importers, exporters, lawyers, transporters, insurers
and students of international trade.

http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/the-incoterms-rules/
Incoterms 2010-EVOLUTION
From 1936 to today: the Incoterms® rules

The Incoterms® were created in 1936 with the purpose of

providing provide a set of international rules for the interpretation
of the most commonly used trade terms in foreign trade. Since
then, ICC expert lawyers and trade practitioners have updated
them six times to keep pace with the development of international
trade.

http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/history-of-the-incoterms-rules/
Incoterms 2010-EVOLUTION
Why revise the Incoterms®?

As commercial practices, types of goods and transports, and international laws evolve,
the Incoterms ® rules need to be regularly updated by experienced international
experts.
Some significant revisions include:

• 1980 –FCA was introduced in order to provide a rule that dealt with the frequent case
where the reception point in maritime trade was no longer the ship’s rail (the
traditional FOB-point) but rather a point on land, prior to loading on board a vessel,
where goods were stored in a container for subsequent transport by sea or by
different means of transport in combination.

• 1990 – the clauses dealing with the seller’s obligation to provide proof of delivery
permitted a replacement of paper documentation by EDI-messages provided the
parties had agreed to communicate electronically.

• 2000 - (1) the placing of the export clearance under FAS on the seller (previously on
the buyer); (2) the specification of the seller’s obligation to load the goods on the
buyer’s collecting vehicle and the buyer’s obligation to receive the seller’s arriving
vehicle unloaded under FCA.

http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010/history-of-
the-incoterms-rules/
DIFFERENCES BETWEEN INCOTERMS 2000 AND 2010 VERSION
1.The 2000 versión had13 INCOTERMS
the 2010 versión has 11 INCOTERMS

2.Inclusion of two new INCOTERMS

(DAP and DAT)

3. Eliminination of 4 INCOTERMS (DEQ,

DES,DAF,DDU)

3.The 2000 versión had 4 groups of

INCOTERMS (E-F-C-D)

4.The 2010 versión has two groups of

INCOTERMS (maritime and other modes
of transportation)
 WORKSHOP INCOTEMRS 2010

In pairs answer the following questions:

1. Explain briefly what are the INCOTERMS?

2. Explain at least 3 changes inthe INCOTERMS versión

2010 and 2020.

3. Why do you consider INCOTERMS important in logistics?

4. Which entity is responsable for regulating the

INCOTERMS?

5. If you are expecting to export to Turkey for the first

time, which INCOTERM would you use? Why?
 INCOTEMRS 2010 CLASSIFICATION
RULES FOR ANY MODE OR MODES OF TRANSPORT

EXW Ex Works
“Ex Works” means that the seller delivers when it places the goods at the
disposal of the buyer at the seller’s premises or at another named place
(i.e.,works, factory, warehouse, etc.). The seller does not need to load the
EXCEPTO MARITIMO
goods on any collecting vehicle, nor does it need to clear the goods for export,
where such clearance is applicable.

FCA Free Carrier

“Free Carrier” means that the seller delivers the goods to the carrier or another
person nominated by the buyer at the seller’s premises or another named place.
The parties are well advised to specify as clearly as possible the point within the
named place of delivery, as the risk passes to the buyer at that point

CPT Carriage Paid To

“Carriage Paid To” means that the seller delivers the goods to the carrier or
another person nominated by the seller at an agreed place (if any such place is
agreed between parties) and that the seller must contract for and pay the costs
of carriage necessary to bring the goods to the named place of destination.

http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/training-on-incoterms-2010-rules/
 INCOTEMRS 2010 CLASSIFICATION
RULES FOR ANY MODE OR MODES OF TRANSPORT

CIP Carriage And Insurance Paid To

“Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier
or another person nominated by the seller at an agreed place (if any such place is agreed
between parties) and thatEXCEPTO
the seller MARITIMO
must contract for and pay the costs of carriage
necessary to bring the goods to the named place of destination.

‘The seller also contracts for insurance cover against the buyer’s risk of loss of or damage
to the goods during the carriage. The buyer should note that under CIP the seller is
required to obtain insurance only on minimum cover. Should the buyer wish to have more
insurance protection, it will need either to agree as much expressly with the seller or to
make its own extra insurance arrangements.”

DAT Delivered At Terminal

“Delivered at Terminal” means that the seller delivers when the goods, once unloaded
from the arriving means of transport, are placed at the disposal of the buyer at a named
terminal at the named port or place of destination. “Terminal” includes a place, whether
covered or not, such as a quay, warehouse, container yard or road, rail or air cargo
terminal. The seller bears all risks involved in bringing the goods to and unloading them
at the terminal at the named port or place of destination.
http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/training-on-incoterms-2010-rules/
 INCOTEMRS 2010 CLASSIFICATION
RULES FOR ANY MODE OR MODES OF TRANSPORT

DAP Delivered At Place

“Delivered at Place” means that the seller delivers when the goods are placed
at the disposal of the buyer on the arriving means of transport ready for
unloading at the named place of destination.
EXCEPTO MARITIMOThe seller bears all risks involved
in bringing the goods to the named place.

DDP Delivered Duty Paid

“Delivered Duty Paid” means that the seller delivers the goods when the goods
are placed at the disposal of the buyer, cleared for import on the arriving means
of transport ready for unloading at the named place of destination. The seller
bears all the costs and risks involved in bringing the goods to the place of
destination and has an obligation to clear the goods not only for export but also
for import, to pay any duty for both export and import and to carry out all
customs formalities.

http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/training-on-incoterms-2010-rules/
INCOTEMRS 2010 CLASSIFICATION

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

FAS Free Alongside Ship

“Free Alongside Ship” means that the seller delivers when the
goods are placed alongside the vessel
EXCEPTO (e.g., on a quay or a barge)
MARITIMO
nominated by the buyer at the named port of shipment. The risk of
loss of or damage to the goods passes when the goods are
alongside the ship, and the buyer bears all costs from that moment
onwards.

FOB Free On Board

“Free On Board” means that the seller delivers the goods on board
the vessel nominated by the buyer at the named port of shipment
or procures the goods already so delivered. The risk of loss of or
damage to the goods passes when the goods are on board the
vessel, and the buyer bears all costs from that moment onwards.

http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/training-on-incoterms-2010-rules/
INCOTEMRS 2010 CLASSIFICATION
RULES FOR SEA AND INLAND WATERWAY TRANSPORT

CFR Cost and Freight

“Cost and Freight” means that the seller delivers the goods on board the vessel or
procures the goods already so delivered. The risk of loss of or damage to the goods
passes when the goods areEXCEPTO
on board MARITIMO
the vessel. the seller must contract for and pay
the costs and freight necessary to bring the goods to the named port of destination.

CIF Cost, Insurance and Freight

“Cost, Insurance and Freight” means that the seller delivers the goods on board the
vessel or procures the goods already so delivered. The risk of loss of or damage to
the goods passes when the goods are on board the vessel. The seller must contract
for and pay the costs and freight necessary to bring the goods to the named port of
destination.

‘The seller also contracts for insurance cover against the buyer’s risk of loss of or
damage to the goods during the carriage. The buyer should note that under CIF the
seller is required to obtain insurance only on minimum cover. Should the buyer wish
to have more insurance protection, it will need either to agree as much expressly
with the seller or to make its own extra insurance arrangements.”
http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/training-on-incoterms-2010-rules/
 INCOTERMS 2010 CLASSIFICATION

1. Origin: 2. Destiny:

• EXW • CFR
• FCA • CIF
• FAS • CPT
• FOB • CIP
• DAT
• DAP
• DDP
 INCOTERMS 2010 WORKSHOP
Class workshop: Please answer with the correct INCOTERM for each case.

1. This INCOTERMS represents the mínimum responsability for the buyer _________
2. The INCOTERM in which the seller has to pay Cost and Air Freight but not International
Insurance is ____________
3. The correct INCOTERM when you, as Colombian, want to import shoes from a Chinnesse
port paying international freight and insurance is _____________
4. The buyer wants to receive the cargo in my Factory, over the truck _______
5. The buyer wants to receive the cargo in the Valparaíso maritime terminal________

True or False

6. In the INCOTERM CFR the seller is responsible for doing the export process _______
7. In the INCOTERM FCA the buyer assumes the cost of the international freight and
international insurance _______
8. In the INCOTERM EXW is the seller´s responsability to provide the buyer all the
supporting documents for the export process_______
9. The INCOTERM FAS includes the unloading costs in the port of destiny agreed with the
buyer______
10. In The INCOTERM DDP the sellers transfers the responsability to the buyer when he
delivers the cargo to the carrier______