INCOTERMS® 2010: TWO DISTINCT GROUPS
1. RULES APPLICABLE TO ANY MODE OF TRANSPORT
- EXW: EX WORKS. The sole responsibility of the vendor is to place the goods at the disposal of the purchaser. The purchaser assumes all costs associated with transport, from the factory gate to the site of destination.
- FCA: FREE CARRIER. The purchaser selects the mode of transport and the carrier, and pays for primary transport. The transfer of charges and risks occurs when goods are collected by the carrier. Export customs clearance is the responsibility of the vendor.
- CPT: CARRIAGE PAID TO. The vendor selects the mode of transport, and pays carriage costs to the designated location. Any risks, loss of goods or increase in costs are assumed by the purchaser immediately upon the handover of goods to the primary carrier.
- CIP: CARRIAGE AND INSURANCE PAID TO. Identical term to CPT, but with the additional provision of transport insurance by the vendor. The vendor concludes the transport contract, pays carriage costs and the insurance premium.
- DAT: DELIVERED AT TERMINAL. Goods are unloaded and delivered on a goods dock in a designated maritime, river, road or rail terminal (import customs clearance and onward transport assumed by the purchaser).
- DAP: DELIVERED AT PLACE. Goods are not unloaded, but are made available to the purchaser in the country of import at the location specified in the contract (unloading and import customs clearance assumed by the purchaser).
- DDP: DELIVERED DUTY PAID. This is the maximum obligation assumed by the vendor: the transfer of charges and risks occurs upon delivery to the premises of the purchaser, and unloading is assumed by the latter (unless provided otherwise).
2. RULES APPLICABLE TO RIVER AND/OR MARITIME TRANSPORT
- FAS: FREE ALONGSIDE SHIP. The vendor delivers customs-cleared goods alongside the ship on the quayside. From this time, all charges and risks are assumed by the purchaser. The purchaser designates the vessel and pays carriage costs.
- FOB: FREE ON BOARD. Goods are placed on board the vessel by the vendor. Export formalities are assumed by the vendor. The purchaser designates the vessel and pays carriage costs. The transfer of charges and risks occurs at the time when the goods pass the ship’s rail.
- CFR: COST AND FREIGHT. The vendor selects the vessel and pays carriage costs to the agreed port. The vendor assumes the loading of goods on the vessel and the completion of dispatch formalities. The transfer of risk is as per FOB.
- CIF: COST, INSURANCE AND FREIGHT. This is the same principle as CFR, with the additional obligation for the vendor to conclude marine insurance for the risk of loss or damage of goods. The vendor pays the insurance premium, and goods are carried at the risk and peril of the purchaser.
AN ESSENTIAL DISTINCTION (Departure/arrival)
7 multimode Incoterms and 4 maritime Incoterms
Sales on departure, with 8 Incoterms: in primary transport, goods are carried at the risk and peril of the purchaser.
- Multimode Incoterms – sale on departure: EXW/FCA/CPT/CIP
- Maritime Incoterms – sale on departure: FAS/FOB/CFR/CIF
Sales on arrival, with 3 Incoterms: in primary transport, goods are carried at the risk and peril of the vendor.
- Multimode Incoterms – sale on arrival: DAT/DAP/DDP
INCOTERMS® 2000 to 2010
- The Incoterms DEQ rule is replaced by DAT.
- The Incoterms DAF/DES/DDU are replaced by DAP.