INCO TERMS

 

11 Terms, 7 for any form of transportation, are summarized in Incoterms® 2020.


INCOTERMS® (2020): Summary of Key Trade Terms

1. EXW (Ex Works / Ex Warehouse)

  • Delivery Point: Seller's premises or specified location (e.g., warehouse, factory).

  • Risk Transfer: When goods are made available to the buyer.

  • Seller's Responsibility: Minimal. No loading or export clearance required.

  • Buyer: Handles all transport, export formalities, and import duties.

2. FCA (Free Carrier)

  • Delivery Point: Agreed location (e.g., seller’s premises, port terminal).

  • Risk Transfer: When goods are delivered to the carrier or nominated party.

  • Seller's Responsibility: Export clearance, delivery to the carrier.

  • Buyer: Responsible from the delivery point onward.

  • 2020 Update: Allows Bill of Lading with onboard notation.

3. FAS (Free Alongside Ship)

  • Delivery Point: Alongside vessel at named port of shipment.

  • Risk Transfer: When goods are placed beside the vessel.

  • Seller's Responsibility: Export clearance and delivery alongside ship.

  • Buyer: Responsible for loading, ocean freight, and insurance.

4. CFR (Cost and Freight)

  • Delivery Point: Onboard ship at port of shipment.

  • Risk Transfer: When goods are loaded onto the ship.

  • Seller: Pays freight to destination port but not insurance.

  • Buyer: Bears risk after loading.

5. CIF (Cost, Insurance, and Freight)

  • Same as CFR, plus:

  • Seller: Must also arrange minimum insurance for the buyer.

  • Buyer: Can request higher coverage, but must arrange separately.

6. CPT (Carriage Paid To)

  • Delivery Point: Goods delivered to the carrier at the agreed location.

  • Risk Transfer: At delivery to carrier.

  • Seller: Pays transport to named destination.

  • Buyer: Responsible after handover to the carrier.

7. CIP (Carriage and Insurance Paid To)

  • Same as CPT, plus:

  • Seller: Must provide minimum insurance coverage for the goods.

  • Buyer: Can request additional insurance, but must arrange it themselves.

8. DAP (Delivered At Place)

  • Delivery Point: Named destination (on arriving vehicle, ready for unloading).

  • Risk Transfer: When goods are ready for unloading.

  • Seller: Bears all risks and costs except unloading.

  • Buyer: Handles unloading and import clearance.

9. DPU (Delivered at Place Unloaded)

  • Replaces DAT (Delivered at Terminal).

  • Delivery Point: Named destination, after unloading.

  • Risk Transfer: After goods are unloaded.

  • Seller: Responsible for all costs and unloading at destination.

  • Buyer: Responsible for import clearance.

10. DDP (Delivered Duty Paid)

  • Delivery Point: Buyer’s location, ready for unloading.

  • Risk Transfer: When goods are delivered to destination.

  • Seller: Bears all costs, risks, and duties (export and import).

  • Buyer: Simply unloads the goods.

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