Incoterms
EX WORKS (NAMED PLACE)
The seller places the goods at the disposal of the buyer at his own premises: factory, warehouse, etc. All costs thereafter are for the buyer’s account.
The EXW Incoterm can be used with any type of transport or a combination of them (known as multimodal transport). In other words, the supplier is in charge of the logistics and the transfer necessary for the buyer to have the supply of the product in the same place where the productive task is carried out. This Incoterm has not been modified in relation to Incoterms 2000.
FREE ALONGSIDE SHIP (NAMED LOADING PORT)
The seller delivers the goods at the agreed quay of the named port of loading, i.e. alongside the ship. The FAS Incoterm is specific to bulk or breakbulk cargo goods because they are deposited at specialized port terminals, which are located on the quay. The seller is responsible for the export customs clearance arrangements and costs (in versions prior to Incoterms 2000, the buyer arranged the export customs clearance).
REE ON BOARD (NAMED LOADING PORT)
The seller delivers the goods on the vessel. The buyer is responsible for nominating and booking the main transport (vessel).
The FOB Incoterm is one of the most widely used in international trade. It must be used for general cargo (drums, coils, containers, etc.) of goods, not usable for bulk.
The FOB Incoterm is used exclusively for transport by ship, either sea or inland waterway
FREE CARRIER (NAMED PLACE)
The seller undertakes to deliver the goods at an agreed point within the country of origin, which may be the premises of a freight forwarder, a railway station… (this agreed place to deliver the goods is usually related to the carrier’s premises). It bears the costs until the goods are located at this agreed point.
The FCA Incoterm can be used with any type of transport: air, rail, road and containerized/multimodal transport. However, it is a little-used Incoterm.
COST AND FREIGHT (NAMED DESTINATION PORT)
The seller bears all costs, including the main carriage, until the goods arrive at the port of destination. However, the risk is transferred to the buyer the moment the goods are loaded on the vessel, in the country of origin. It should be used for general cargo, which is not transported in containers; it is also not appropriate for bulk cargo.
The CFR Incoterm is only used for transport by ship, either sea or inland waterway.
COST, INSURANCE AND FREIGHT (NAMED DESTINATION PORT)
The seller bears all costs, including main carriage and insurance, until the goods arrive at the named port of destination. Although the insurance has been taken out by the seller, the beneficiary of the insurance is the buyer.
As in the previous Incoterm, CFR, the risk is transferred to the buyer when the goods are loaded on the vessel in the country of origin. The CIF Incoterm is one of the most used in international trade because the conditions of a CIF price are those that mark the customs value of a product that is imported. It must be used for general or conventional cargo.
The CIF Incoterm is exclusive of maritime means.
CARRIAGE PAID TO (NAMED PLACE OF DESTINATION)
The seller bears all costs, including the main carriage, until the goods arrive at the named point in the country of destination. However, the risk is transferred to the buyer upon delivery of the goods to the carrier within the country of origin.
The CPT Incoterm can be used with any mode of transport including multimodal transport (combination of different types of transport to reach the destination).
CARRIAGE AND INSURANCE PAID (TO) (NAMED PLACE OF DESTINATION)
The seller bears all costs, including main carriage and insurance, until the goods arrive at the named point in the country of destination. The risk passes to the buyer upon delivery of the goods to the carrier within the country of origin. Although the insurance has been contracted by the seller, the beneficiary of the insurance is the buyer.
The CIP Incoterm can be used with any mode of transport or a combination of them (multimodal transport).
DELIVERED AT TERMINAL (NAMED PORT)
The DAT Incoterm is used for all types of transport. It is one of the two new Incoterms 2010 with DAP and replaces the DEQ Incoterm.
The seller bears all costs, including main carriage and insurance (which is not compulsory), until the goods are unloaded at the named terminal. He also assumes the risks up to that point.
The concept of terminal is quite broad and includes land and sea terminals, ports, airports, free zones, etc.): it is therefore important that the place of delivery of the goods is clearly specified and that this place coincides with the one specified in the contract of carriage.
Incoterm DAT was frequently used in international bulk trade because the point of delivery coincides with the bulk terminals of the ports (in the versions prior to Incoterms 2000, with Incoterm DEQ, the import customs duty was paid by the seller; in the current version, it is paid by the buyer).
DELIVERED AT PLACE (NAMED DESTINATION PLACE)
The DAP Incoterm is used for all types of transport. It is one of the two new 2010 Incoterms with DAT. It replaces Incoterms DAF, DDU and DES.
The seller bears all costs, including main carriage and insurance (which is not compulsory) but not the costs associated with importation, until the goods are placed at the disposal of the buyer on a vehicle ready for unloading. It also assumes the risks until that time.
DELIVERED DUTY PAID (NAMED DESTINATION PLACE)
The seller pays all costs until the goods are delivered at the named point in the country of destination. The buyer does not make any formalities. Import customs charges are borne by the seller. The type of transport is multipurpose/multimodal.