Incoterms are standard trade terms published by the International Chamber of Commerce. Each one says who arranges and pays for transport, insurance and customs, and when the risk passes from seller to buyer. The current set is Incoterms 2020.
Any mode of transport
- EXW, Ex Works: the buyer collects from the seller's premises and takes on almost all the cost and risk from there.
- FCA, Free Carrier: the seller hands the goods, cleared for export, to the buyer's carrier at an agreed place.
- CPT, Carriage Paid To: the seller pays carriage to the destination, but the risk passes when the goods are handed to the first carrier.
- CIP, Carriage and Insurance Paid To: like CPT, but the seller also buys insurance, with wider cover than CIF requires.
- DAP, Delivered at Place: the seller delivers to the named place, ready for unloading. The buyer handles import clearance and duties.
- DPU, Delivered at Place Unloaded: like DAP, but the seller also unloads the goods.
- DDP, Delivered Duty Paid: the seller delivers, clears the goods for import and pays the duties.
Sea and inland waterway only
- FAS, Free Alongside Ship: the seller places the goods alongside the vessel at the port of shipment.
- FOB, Free on Board: the seller loads the goods on board. The risk passes to the buyer once they are on the vessel.
- CFR, Cost and Freight: the seller pays freight to the destination port, but the risk passes once the goods are on board at origin.
- CIF, Cost, Insurance and Freight: like CFR, with the seller also buying a minimum level of insurance.
Why it matters on Tradelynz
The Incoterm on an order tells both sides who arranges shipping, who insures the goods and when the risk moves. Put it in your request for quote so every offer is priced on the same basis.
