INCOTERMS 2010

Chart of Responsibility

When negotiating an international sales contract, both contracting parties need to pay a lot of attention to both the terms of sales and the sales price. To render it as clear as possible, most countries have adopted an international set of trade terms (INCOTERMS 2010) that exactly determine the responsibilities and risks of both the buyer and seller, while the merchandise is in transit.

The following chart summarizes the responsibilities of both the buyer and seller for each of the 13 INCOTERMS 2010. Moreover, a definition of each term is included after the chart.

RULES FOR ANY MODE OF TRANSPORT

EXW FCA
CHARGES Ex works Free Carrier
Packaging S or B S
Loaading Charges B S*
Delivery to Port/Place B S
Export Duty & Taxes B S
Origin Terminal Charges B B
Loading on Carriage B B
Carriage Charges B B
Insurance B B
Unloading from Carriage B B
Destination Terminal Charges B B
Import Duty & Taxes B B
Delivery to Destination B B
Unloading Charges B B

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

FAS FOB CFR CIF
CHARGES Free Alongside Ship Free On Board Cost & Freight Cost Insurance & Freight
Packaging S S S S
Loaading Charges S S S S
Delivery to Port/Place S S S S
Export Duty & Taxes S S S S
Origin Terminal Charges S S S S
Loading on Carriage B S S S
Carriage Charges B B S S
Insurance B B B S
Unloading from Carriage B B B B
Destination Terminal Charges B B B B
Import Duty & Taxes B B B B
Delivery to Destination B B B B
Unloading Charges B B B B

RULES FOR ANY MODE OF TRANSPORT

CPT CIP DAT DAP DDP
CHARGES Carriage Paid To Carriage Insurance Paid To Delivered at Terminal Delivered at Place Delivered Duty Paid
Packaging S S S S S
Loaading Charges S S S S S
Delivery to Port/Place S S S S S
Export Duty & Taxes S S S S S
Origin Terminal Charges S S S S S
Loading on Carriage S S S S S
Carriage Charges S S S S S
Insurance B S S ** S S
Unloading from Carriage S S S S S
Destination Terminal Charges S S S S S
Import Duty & Taxes B B B S S
Delivery to Destination B B B B S
Unloading Charges B B B B S

S = Seller
B = Buyer

* Buyer assumes all risks and costs associated with delivery of goods to final destination including transportation after delivery to carrier and any customs fees to import the product into a foreign country.
**Under negotiation between Seller and Buyer

* There are actually 2 FCA terms: FCA Seller’s Premises, when the seller is responsible only for the loading of goods and not for inland freight and FCA Named Place (International Carrier), when the seller is responsible for inland freight.

 

The 13 INCOTERMS

Origin Terms

EXW – Ex-Works, named place, where shipment is available to the buyer, not loaded.
The seller will not contract for any transportation. International Carriage NOT Paid by Seller

FCA – Free Carrier, unloaded at the seller’s dock OR a named place where shipment is available to the international carrier or agent, not loaded.
This term can be used for any mode of transport.

FAS – Free Alongside Ship, named ocean port of shipment.
Ocean shipments that are NOT containerized.

FOB – Free On Board vessel, named ocean port of shipment.
This term is used for ocean shipments only where it is important that the goods pass the ship’s rail.

International Carriage Paid by the Seller

CFR – Cost and Freight, named ocean port of destination.
This term is used for ocean shipments that are not containerized.

CIF – Cost, Insurance and Freight, named ocean port of destination.
This term is used for ocean shipments that are not containerized.

CPT – Carriage Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.

CIP – Carriage and Insurance Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
Arrival at Stated Destination

DAF – Delivered At Frontier, named place of destination, by land, not unloaded.
This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the goods are unloaded at the terminal. “Terminal” includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The buyer covers the cost of transporting the goods from the terminal or port to final destination and pays the import duty/taxes/customs costs.

DAP – Delivered At Place.
This term means that the seller pays all the costs of transportation (export fees, carriage, insurance, and destination port charges) up to and including the delivery of the goods to the final destination. The buyer is responsible to pay only the import duty/taxes/customs costs. The buyer also is responsible to unload the goods from the vehicle at the final destination

DDP – Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term is used for any mode of transportation.