A GUIDE TO INCOTERMS 2010
The current Incoterms® 2010 created by the International Chamber of Commerce (ICC), is a set of rules developed for practice in contracts for the sale of goods. The rules are organized in a set of three-letter trade terms. The terms describe the tasks, costs, and risks associated in the delivery of goods from the sellers to the buyers ICC has developed two new rules, DAT and DAP, to replace the 2000 rules DAF, DES, DEQ, and DDU. There are a total of eleven rules.
Rules for Any Mode(s) of Transportation:
EX WORKS (EXW) – Seller places goods at the disposal of the buyer at the seller’s premises or another named location. Seller will not contract for loading of goods, collecting vehicles or clearing goods through customs.
FREE CARRIER (FCA) – Seller delivers the goods to the carrier or named person at the seller’s premises or another named location. Seller is required to clear goods through export only.
CARRIAGE PAID TO (CPT) – Seller delivers the goods to the carrier or named person at an agreed location. The seller contracts to pay the costs of carriage to the destination. Buyer assumes all risks at the first transfer of goods. The seller is required to clear goods through export only.
CARRIAGE AND INSURANCE PAID TO (CIP) – Seller delivers the goods to the carrier or named person at an agreed location. The seller contracts to pay for carriage to the agreed location and the cost of insurance. The seller is required to clear goods through export only.
DELIVERED AT TERMINAL (DAT) – Seller delivers and unloads goods at a named terminal. The seller assumes all risks associated with delivering and unloading the goods at the terminal. The seller is required to clear goods through export only.
DELIVERED AT PLACE (DAP) – Seller pays for carriage to the named place and assumes all risks prior to the point that the goods are ready for unloading by the buyer. The seller is required to clear goods through export only.
DELIVERED DUTY PAID (DDP) – Seller delivers the goods to the named place and assumes all costs associated with delivering the goods. The seller is required to clear goods through export and import.
Rules for Sea and Inland Waterway Transportation:
FREE ALONGSIDE SHIP (FAS) – Seller delivers goods placed alongside a vessel at the named port nominated by the buyer. Seller bears all costs associated with transport until the goods are alongside the vessel; buyer assumes risks from that point forward. The seller is required to clear goods through export only.
FREE ON BOARD (FOB) – Seller delivers and loads the goods on the vessel nominated by the buyer. The seller bears all costs associated with transportation. All risks are assumed by the buyer after the point of delivery and unloading. The seller is required to clear goods through export only.
COST AND FREIGHT (CFR) – Seller delivers the goods on board the vessel. The seller contracts to pay for the cost of freight to move the goods to the port of destination. Risks are passed at the point of delivery on board the vessel. The seller is required to clear goods through export only.
COST INSURANCE AND FREIGHT (CIF) – Seller delivers the goods on board the vessel. The seller contracts for the cost of freight to move the goods to the port of destination. The seller also contracts and pays for the cost of insurance. The seller is required to clear goods through export only.
“Incoterms” is a registered trademark of the International Chamber of Commerce
