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Samuel Shapiro & Company Inc.Incoterms 2010
INCO Terms - Purpose Contract of Carriage Incoterms 11 Terms 4
General Groups of Terms Incoterms EXW Ex Works Incoterms FCA Free
Carrier
Incoterms CPT Carriage Paid To Incoterms CIP Carriage and
Insurance Paid To Incoterms DAT Delivered at Terminal Incoterms DAP
Delivered at Place Incoterms DDP Delivered Duty Paid Incoterms FAS
Free Alongside Ship Incoterms FOB Free On Board Incoterms CFR Cost
and Freight Incoterms CIF Cost, Insurance and Freight Incoterms vs.
Mode of Transport
Incoterms 2010Incoterms, also referred to as Terms of Sale,
stand for International Commercial Terms.Incoterms define the terms
of shipment and delivery, as well as the transfer of risk, between
thebuyer and seller.In proper use, the Incoterm must be stated with
the specific place plus Incoterms 2010. The namedplace is where the
sellers cost ends and is also the sellers delivery point with the
exception of the
C terms.Incoterms were created by the International Chamber of
Commerce (ICC) and are a registeredtrademark of the ICC.Incoterms
are regularly updated to keep pace with the ever-changing world of
international trade.The latest edition is the Incoterms 2010 which
are effective January 1, 2011.
Contract of CarriageThe Incoterm utilized in a transaction will
dictate which party is responsible for each transportationsegment
and its corresponding contract of carriage.
Pre-Carriage: the transportation segment from the sellers
location to the point where the cargowould leave from the sellers
side. Example, to arrange for pre-carriage, you would contract with
aninland carrier to make delivery to a port or airport.
Main Carriage: the transportation segment from the sellers side
to the buyers side. Example, toarrange for main-carriage, you would
contract for ocean or air carriage.
On-Carriage: the transportation segment from the point of
arrival on the buyers side to thedesignated ultimate receiver.
Example, to arrange for on-carriage, you would contract with an
inlandcarrier to make delivery from the port/airport of arrival to
the ultimate receiver.
DeliveryDelivery is the point where the risk transfers from the
seller to the buyer. Delivery is defined for eachIncoterm.
4 General Groups of TermsE term: sellers obligation and control
of shipment is at its minimumF terms: require the buyer to arrange
for main carriageC terms: require the seller to arrange for main
carriageD terms: sellers obligation and control is at its
maximum
Incoterms 11 TermsEXW - Ex Works
FCA Free CarrierCPT Carriage Paid ToCIP Carriage and Insurance
Paid ToDAT Delivered at TerminalDAP Delivered at Place
Incoterms
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DDP Delivered Duty PaidFAS Free Alongside ShipFOB Free On
BoardCFR Cost and FreightCIF Cost, Insurance and Freight
EXW Ex WorksThe sellers obligation is fulfilled when the buyer
has been notified, and the goods (suitably packedfor export) are
available to the buyer, at the named place within the time
specified.
The buyer is responsible for all costs and risks, including the
loading of the goods from thenamed/specified point.
The buyer is responsible to arrange the entire contract of
carriage of the goods (pre-carriage, maincarriage,
on-carriage).
The buyer is responsible for the export clearance of the goods.
This term should not be used when thebuyer cannot carry out the
export formalities directly or indirectly. U.S. exporters should
note thatthey are still responsible for export compliance when
selling Ex Works.
The buyer is responsible for the import clearance of the
goods.
FCA Free CarrierThe sellers risk, cost and responsibility end
when he delivers the goods, cleared for export, to thecarrier
nominated by the buyer at the named place. The named place could be
the sellers premises
or another place named for delivery on the sellers side.
The buyer must contract at his own expense the carriage of the
goods from the named place.
The buyer is responsible for the import clearance of the
goods.
CPT Carriage Paid ToThe sellers risk and responsibility for the
condition of the cargo end when the goods are delivered tothe first
carrier. The seller must bear all transportation costs to the named
destination on the buyersside.
The seller is responsible for the export clearance of the
goods.
The buyer is responsible for the import clearance of the
goods.
CIP Carriage and Insurance Paid To
The sellers risk and responsibility for the condition of the
cargo end when the goods are delivered tothe first carrier. The
seller must bear all transportation costs to the named destination
on the buyersside.
The seller is responsible for the export clearance of the
goods.
The seller is responsible to provide insurance. Please note the
seller is obligated to provide minimuminsurance only, so we
recommend the buyer obtain additional insurance coverage.
The buyer is responsible for the import clearance of the
goods.
DAT Delivered At TerminalThe sellers obligation ends when he has
delivered the goods to the disposal of the buyer, unloadedfrom the
arriving carrier at the named destination terminal, cleared for
export, but not cleared forimport.
The buyer is responsible for the import clearance of the
goods.
If the seller is also to be responsible for delivering the goods
past the terminal to another place, thenDAP or DDP terms should be
used.
DAP Delivered At PlaceThe sellers obligation ends when he has
delivered the goods to the disposal of the buyer at thenamed
destination place, cleared for export, but not cleared for import.
The seller and buyer shouldagree which party will be responsible
for unloading.
The buyer is responsible for the import clearance of the
goods.
DDP Delivered Duty PaidThe sellers obligation is fulfilled when
the goods have been made available to the buyer at thenamed place
of destination, cleared for import.
The buyer is responsible to take delivery of the goods at the
named place of destination.
The seller is required to arrange for the entire contract of
carriage (pre-carriage, main carriage, on-carriage) to the named
place of destination.
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The seller is responsible for the export clearance of the
goods.
The seller is required to arrange for the import clearance of
the goods, including the payment of anyapplicable duties, taxes and
fees.
FAS Free Alongside ShipThe sellers obligation is to deliver the
goods alongside the vessel at the named port of shipment.
The seller is responsible for the export clearance of the
goods.
The buyer is responsible for all costs and risks to load and
transport the goods to their finaldestination once the cargo is
delivered alongside the vessel.
The buyer is responsible for the import clearance of the
goods.
This term is most commonly used for vessel charter shipments.
FCA would be more appropriate forcontainerized cargo.
FOB Free On BoardThe sellers obligation is fulfilled once the
goods have been placed on board the vessel at the namedport.
The buyer is responsible for all costs and risks associated with
the goods after they have been loadedon board the ship at the named
port.
The buyer is responsible to arrange for the carriage of the
goods from the named port of shipment(the main-carriage and
on-carriage).
The seller is responsible for the export clearance of the
goods.
The buyer is responsible for the import clearance of the
goods.
If the cargo is delivered to the carrier by the seller before
the goods are loaded on board the vessel,then FCA would be more
appropriate.
CFR Cost and FreightThe sellers risk and responsibility for the
condition of the cargo end when the goods are placed onboard the
vessel. The seller must bear all transportation costs to the named
port on the buyers side.
The seller is responsible to arrange for the pre-carriage and
main-carriage of the goods.
The seller is responsible for the export clearance of the
goods.
The buyer is responsible for the import clearance of the
goods.
CIF Cost, Insurance and FreightThe sellers risk and
responsibility for the condition of the cargo end when the goods
are placed onboard the vessel. The seller must bear all
transportation costs to the named port on the buyers side.
The seller is responsible to arrange for the pre-carriage and
main-carriage of the goods.
The seller is responsible for the export clearance of the
goods.
The seller is responsible to provide insurance. Please note the
seller is obligated to provide minimuminsurance only, so we
recommend the buyer obtain additional insurance coverage.
The buyer is responsible for the import clearance of the
goods.
Incoterms and Mode of TransportAny Mode: EXW, FCA, CPT, CIP,
DAT, DAP, DDP
Vessel only: FAS, FOB, CFR, CIF
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