Incoterms

EXW

Ex-Works

• This is when the buyer of the product assumes almost all of the costs and risk associated with the shipping process
• The seller only has to make sure that the buyer has access to the goods
• Once the buyer has access to the goods, all responsibility falls on to them

DAP

Delivery At Place

• This is when the seller covers all the costs and risks associated with transporting goods to an agreed address
• When the goods are delivered, they are classed as delivered and unloaded
• The seller will organise all customs clearance while the buyer deals with any import clearance and related duties

DDP

Delivered Duty Paid

• This is when the seller takes almost all responsibility throughout the whole shipping process, covering all costs and risks of transporting goods to the delivery address
• The seller fulfils all export and import responsibilities as well as paying any duties that are due

CIP Incoterms

Carriage and Insurance Paid To

• The seller is responsible for all risks until the goods are delivered to the first carrier at the place of shipping
• Once the goods are delivered to the first carrier, the responsibility shifts to the buyer
• The seller is required to purchase the maximum level of insurance for the goods for the buyer’s risk

DPU Incoterms

Delivered At Place Unloaded

• In previous Incoterm publications, this was known as DAT (Delivery At Terminal)

• The seller is responsible for all the costs and risks of delivering the goods to an agreed place of unloading

   

• The seller organises all customs clearance and the unloading of the goods at the place of delivery

• The buyer is responsible of sorting import clearance and any duties that are related

FCA Incoterms

Free Carrier

•  The seller is responsible to get the goods to the buyer’s carrier •
• The seller also needs to clear goods for export

CPT Incoterms

Carriage Paid To

•  The responsibilities of the seller are the same here as with FCA Incoterms, however with CPT, the seller also covers all delivery costs
• It is also the seller’s responsibility to clear all the goods for export

FAS Incoterms

Free Alongside Ship

• The seller is responsible for all costs and all risks until the goods have been delivered next to the ship
• The buyer takes over responsibility for costs and risk once goods have been delivered next to ship
• The buyer is in charge of all export and import clearances

FOB Incoterms

Free On Board

• The seller is responsible for all costs and risks until all the goods have been delivered on board the ship
• The seller is responsible for sorting out the export clearance
• Once the goods are delivered on board, the buyer then assumes all responsibilities of the goods

CFR Incoterms

Cost and Freight

• The seller has the same responsibilities as with the FOB Incoterms, however the seller is also responsible for paying the cost of bringing the goods to the port
• The buyer assumes all responsibility once the goods are on board the ship

CIF Incoterms

Cost, Insurance, and Freight

• The seller has all the same responsibilities as with CFR Incoterms, however they are also responsible for covering all insurance costs

• The seller is required to purchase the minimum amount of insurance cover which is 110% of the invoice value. This has to be in the currency of the invoice and contract

• If the buyer wants different insurance, the seller is responsible for arranging this but at the cost of the buyer