What is Incoterms?
·
Incoterms are predefined set of commercial terms
that are widely used for international transactions.
·
They are published by International Chamber of
Commerce (ICC)
·
They are used for clearly communicating with the
client about a task and also to clarify all the costs and risks associated with
the delivery and transportation of the goods.
Incoterm categories:
Depending on the method of delivery, incoterm 2010 can be
divided into 2 categories:
 |
Any mode of transportation:·
EXW (Ex works): §
The seller makes the goods available at the
premises of the buyer. §
The buyer bears all the transportation costs and
risks associated with delivering the goods to their premises. §
Commercial invoice and documentations are
prepared by the seller. § Buyer takes the responsibilities of export license and custom formalities. Also read:Description of all the documents that are needed for garments import.·
FCA (Free carrier): §
The seller handover the goods to the first
carrier at the named place. §
The first carrier is decided by the buyer. §
The seller bear the transportation up to the
point where they handover the goods to the first carrier. §
The risk of bearing the goods is also
transferred at that point. §
FCA is best in terms of costs and risks when
there is containerized shipment. §
The seller takes the responsibility of export
clearance and custom formalities of the goods. ·
CPT (Carriage paid to): §
The seller handover the goods to the first
carrier at the named place. §
The first carrier is decided by the buyer. §
The seller bear the transportation cost up to the
point of destination. §
The risk of bearing the goods is transferred at
the handover point from the seller to the buyer. §
Commercial invoice and documentations are
prepared by the seller. §
Seller takes the responsibilities of export
license and custom formalities. §
Buyer handles all the import related
formalities. §
Can be used for ocean freight, air freight or in
case of any small parcel. ·
CIP (Carriage and insurance paid to): §
The seller handover the goods to the first
carrier at the named place. §
The first carrier is decided by the buyer. §
The seller bear the transportation cost and the
insurance cost up to the point of destination. §
But the risk of goods are transferred from the
seller to the buyer at the handover point. §
Commercial invoice and documentations are
prepared by the seller. §
Seller takes the responsibilities of export
license and custom formalities. §
Buyer handles all the import related
formalities. ·
DAT (Delivered at terminal) [Now known as DPU
(Delivered at place unloaded)]: §
The seller makes the goods available up to the
terminal port. §
The seller takes all the risks of carrying the
goods up to the terminal point. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Buyer prepares all the import related documents. §
Seller pays the loading, unloading charges. ·
DAP (Delivered at place): §
The seller delivers the goods at the place of
the buyer where are goods are ready to be unloaded by the buyer. §
The seller bear all the risk of carrying the
goods up to buyer’s place. §
The seller pays all the carriage cost up to that
point. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Buyer prepares all the import related documents. §
Buyer pays the goods unloading cost. ·
DDP (Delivered duty paid): §
The seller takes all the responsibilities
related to transportation, risk bearing, export-import related formalities,
fees and duties etc. up to the point where goods are ready to be unloaded by
the buyer. §
Buyer do not have any responsibilities unless
they unload the goods. § This has minimum responsibility on the buyer and maximum responsibility on the buyer. · Sea and Inland waterway transportation:FAS (Free alongside ship): §
The seller makes the goods available alongside
the ship at the named port. §
It is popular with bulk cargo, such as oil or
grain. §
The cost of carriage and risk of bearing the
goods are handover at the port. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Buyer pays the the loading, unloading cost. §
Buyer takes care of all import related
formalities and documents. ·
FOB (Free on board): §
The seller loads the goods on the vessel at the
named port nominated by the buyer. §
Seller bear the cost and risk related to the
goods up to that point. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Seller pays the the loading cost. §
Buyer pays the unloading cost. §
Buyer takes care of all import related
formalities and documents. ·
CFR (Cost and freight) [Formerly known as CNF
(C&F)]: §
The seller pays the carriage cost and freight up
to the point of destination. §
But the risk is transferred when the goods are
loaded in the vessel. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Seller pays the the loading cost. §
Buyer pays the unloading cost. §
Buyer takes care of all import related
formalities and documents. ·
CIF (Cost, insurance and freight): §
The seller pays the carriage cost, insurance
cost and freight up to the point of destination. §
But the risk of carrying the goods is
transferred when the goods are loaded in the vessel. §
The seller prepares the commercial invoice and
documents. §
The seller takes the responsibilities of export
license and custom formalities. §
Seller pays the the loading cost. §
Buyer pays the unloading cost. §
Buyer takes care of all import related
formalities and documents. |
){kind=link}
0 Comments