Incoterms – LinkRoute Logistics International

EXW – Ex Works

Seller is only responsible for making the goods available at the seller’s premises. The buyer bears the full risk from there to the destination.

FCA – Free Carrier

Seller is responsible for delivery to the custody of the carrier, which is provided by the buyer. Risk is transferred as soon as loading has taken place.

CPT – Carriage Paid To

Seller delivers the goods to the carrier at an agreed place of delivery and pays for transport to the named destination. Risk is transferred at the place of delivery, whereas seller pays for transport to the destination.

CIP – Carriage and Insurance Paid to

Seller delivers the goods to the carrier at an agreed place of delivery and pays for transport and insurance to the named destination. Risk is transferred at the place of delivery, whereas seller pays for transport and insurance to the destination.

DAT – Delivered At Terminal

Seller delivers the goods unloaded at a specified place inside the agreed terminal. Risk is transferred as soon as the goods have been unloaded.

DAP – Delivered At Place

Seller delivers the goods to the disposal of the buyer on the arriving means of transport at the agreed place. Seller assumes the risk until the goods are made ready for unloading from the arriving means of transport.

DDP – Delivered Duty Paid

Seller is responsible for bringing the goods to the destination, paying any duty and making the goods available to the buyer. Risk is transferred as soon as the buyer has access to the goods ready for unloading at the agreed destination.

FAS – Free Alongside Ship

Seller is responsible for delivery of the goods at the quay alongside the ship. From this point onwards, the risk lies with the buyer.

FOB – Free on Board

Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB shipping point” or “FOB origin” means the buyer is at risk and takes ownership of goods once the seller ships the product.

CFR – Cost and Freight

The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to buyer when the goods have been loaded on board the ship in the country of Export. The Shipper is responsible for origin costs including export clearance and freight costs for carriage to named port. The shipper is not responsible for delivery to the final destination from the port (generally the buyer’s facilities), or for buying insurance. If the buyer does require the seller to obtain insurance, the Incoterm CIF should be considered. CFR should only be used for non-containerized seafreight and inland waterway transport; for all other modes of transport, it should be replaced with CPT.

CIF – Cost, Insurance & Freight

Use of this rule is restricted to goods transported by sea or inland waterway. In practice, it should be used for situations where the seller has direct access to the vessel for loading, e.g. bulk cargo or non-containerized goods. For containerized goods, consider ‘Carriage and Insurance Paid CIP’ instead.

Seller arranges and pays for transport to named port. The seller delivers goods, cleared for export, loaded on board the vessel. However risk transfers from seller to buyer once the goods have been loaded on board, i.e. before the main carriage takes place.Seller also arranges and pays for insurance for the goods for carriage to the named port.However as with “Carriage and Insurance Paid To”, the rule only requires a minimum level of cover, which may be commercially unrealistic. Therefore the level of cover may need to be addressed elsewhere in the commercial agreement.