Global incoterms
Incoterms, or International Commercial Terms, are globally recognized shipping rules that define the responsibilities between buyer and seller. They help clarify who is responsible for freight costs, insurance, customs clearance, delivery, and risk during each stage of the shipment.
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Clarify Responsibilities: Specify who (buyer or seller) is responsible for paying for and managing the delivery of goods, including insurance, transportation, and customs clearance.
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Reduce Risks: Clearly show where the seller’s responsibility ends and where the buyer’s responsibility begins.
EXW
Ex Works: Seller makes goods available at their premises or another named place.
Seller is not responsible for loading the goods or export clearance; buyer bears all costs and risks from pickup onward.
FCA
Free Carrier: Seller delivers goods to the carrier or another party nominated by the buyer at the named place. If delivery occurs at the seller’s premises, the seller is responsible for loading; otherwise, the seller is not responsible for unloading.
FAS
Free Alongside Ship: Seller delivers when goods are placed alongside the vessel at the named port of shipment. Risk transfers to the buyer at that point
FOB
Free on Board: Seller delivers and loads the goods onto the vessel at the origin port. Risk transfers to the buyer once goods are on board.
CFR
Cost and Freight: Seller pays ocean freight to the destination port. Risk transfers to the buyer once goods are loaded on board the vessel at the port of shipment,
CIF
Cost, Insurance, and Freight: Seller pays ocean freight and provides minimum insurance to the destination port. Risk transfers to the buyer once goods are loaded on board the vessel at the port of shipment.
CIP
Carriage and Insurance Paid To: Seller pays freight and provides higher-level insurance (more comprehensive than CIF) to the named destination. Risk transfers to the buyer once goods are handed over to the first carrier.
CPT
Carriage Paid To: Seller pays freight to the named destination. Risk transfers to the buyer once goods are handed to the first carrier.
DAP
Delivered at Place: Seller delivers the goods to the named destination, ready for unloading. Buyer handles import clearance, duties, taxes, and unloading.
DPU
Delivered at Place Unloaded: Seller delivers and unloads the goods at the named destination. Buyer handles import clearance, duties, and taxes.
DDP
Delivered Duty Paid: Seller handles freight, import clearance, duties, taxes, and delivery to the named destination. Buyer receives the goods with the most seller responsibility.