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Incoterms
2010 |
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For those involved in international freight transactions, the
following explanations of international standard trade
definitions are useful in outlining risks and responsibilities
between buyers and sellers.
This page highlights the Incoterms 2010 changes from Incoterms
2000.
Incoterms 2010
The International Chamber of Commerce has released the table of
contents to the Incoterms 2010. Incoterms
2010 consists of only 11 Incoterms, a reduction from the 13
Incoterms 2000.
The Incoterms 2010 are organized into two categories:
Incoterms for any Mode or Modes of Transport:
* EXW - Ex Works
* FCA - Free Carrier
* CPT - Carriage Paid To
* CIP - Carriage and Insurance Paid
* DAT - Delivered At Terminal (new)
* DAP - Delivered At Place (new)
* DDP - Delivered Duty Paid
Incoterms for Sea and Inland Waterway Transport Only:
* FAS - Free Alongside Ship
* FOB - Free On Board
* CFR - Cost and Freight
* CIF - Cost, Insurance and Freight
The reduction in Incoterms from 13 to 11 different terms was
accomplished by substituting two new Incoterms,
DAT (Delivered at Terminal) and DAP (Delivered at Place), for
DAF (Delivered at Frontier), DES (Delivered Ex-Ship),
DEQ (Delivered Ex-Quay) and DDU (Delivered Duty Unpaid).
Incoterms 2010 also addresses duties to provide information
regarding security-related clearances, such as
Importer Security Filings and other chain-of-custody
information.
Contrary to some predictions, Incoterm FAS remains in Incoterms
2010, since that Incoterm is important in bulk
and break-bulk trade.
Incoterms 2010: Expanded Summary
Note: an Incoterm must be accompanied by a "named place"
ex. "FOB Sydney", "EXW Tahiti"
Jump to:
EXW
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FCA
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CPT
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CIP
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DAT
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DAP
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DDP
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FAS
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FOB
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CFR
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CIF
EXW (Ex Works)
The buyer bears all costs and risks involved in taking the goods
from the seller's premises to the desired destination.
The seller's obligation is to make the goods available at his
premises (works, factory, warehouse). This term
represents minimum obligation for the seller. This term can be
used across
all modes of transport.
FCA (Free Carrier)
The seller's obligation is to hand over the goods, cleared for
export, into the charge of the carrier named by the buyer
at the named place or point. If no precise point is indicated by
the buyer, the seller may choose within the place or
range stipulated where the carrier shall take the goods into his
charge. When the seller's assistance is required in
making the contract with the carrier the seller may act at the
buyers risk and expense.
This term can be used across all modes of transport.
CPT (Carriage Paid To)
The seller pays the freight for the carriage of goods to the
named destination. The risk of loss or damage to the goods
occurring after the delivery has been made to the carrier is
transferred from the seller to the buyer. This term requires
the seller to clear the goods for export and can be used across
all modes of transport.
CIP (Carriage & insurance Paid to)
The seller has the same obligations as under CPT but has the
responsibility of obtaining insurance against the buyer's
risk of loss or damage of goods during the carriage. The seller
is required to clear the goods for export however is only
required to obtain insurance on minimum coverage. This term
requires the seller to clear the goods for export and can
be used across all modes of transport.
DAT (Delivered At Terminal)
New Term - May be used for all transport modes Seller delivers
when the goods, once unloaded from the arriving means
of transport, are placed at the disposal of the buyer at a named
terminal at the named port or place of destination.
"Terminal" includes quay, warehouse, container yard or road,
rail or air terminal. Both parties should agree the terminal
and if possible a point within the terminal at which point the
risks will transfer from the seller to the buyer of the goods.
If it is intended that the seller is to bear all the costs and
responsibilities from the terminal to another point, DAP or DDP
may apply.
Responsibilities
* Seller is responsible for the costs and risks to bring the
goods to the point specified in the contract
* Seller should ensure that their forwarding contract mirrors
the contract of sale
* Seller is responsible for the export clearance procedures
* Importer is responsible to clear the goods for import, arrange
import customs formalities, and pay import duty
* If the parties intend the seller to bear the risks and costs
of taking the goods from the terminal to another place
then the DAP term may apply
DAP (Delivered At Place)
New Term - May be used for all transport modes Seller delivers
the goods when they are placed at the disposal of the
buyer on the arriving means of transport ready for unloading at
the named place of destination. Parties are advised to
specify as clearly as possible the point within the agreed place
of destination, because risks transfer at this point from
seller to buyer. If the seller is responsible for clearing the
goods, paying duties etc., consideration should be given to
using the DDP term.
Responsibilities
* Seller bears the responsibility and risks to deliver the
goods to the named place
* Seller is advised to obtain contracts of carriage that match
the contract of sale
* Seller is required to clear the goods for export
* If the seller incurs unloading costs at place of destination,
unless previously agreed they are not entitled to recover
any such costs
* Importer is responsible for effecting customs clearance, and
paying any customs duties
DDP (Delivered Duty Paid)
The seller is responsible for delivering the goods to the named
place in the country of importation, including all costs
and risks in bringing the goods to import destination. This
includes duties, taxes and customs formalities. This term
may be used irrespective of the mode of transport.
FAS (Free Alongside Ship)
The seller has fulfilled his obligation when goods have been
placed alongside the vessel at the port of shipment.
The buyer is responsible for all costs and risks of loss or
damage to the goods from that moment.
The buyer is also required to clear the goods for export. This
term should only be used for sea or inland waterway
transport.
FOB (Free On Board)
Once the goods have passed over the ship's rail at the port of
export the buyer is responsible for all costs and risks
of loss or damage to the goods from that point. The seller is
required to clear the goods for export.
This term should only be used for sea or inland waterway
transport.
CFR (Cost and Freight)
The seller must pay the costs and freight required in bringing
the goods to the named port of destination. The risk
of loss or damage is transferred from seller to buyer when the
goods pass over the ship's rail in the port of shipment.
The seller is required to clear the goods for export. This term
should only be used for sea or inland waterway transport.
CIF (Cost, Insurance & Freight)
The seller has the same obligations as under CFR however he is
also required to provide insurance against the buyer's
risk of loss or damage to the goods during transit. The seller
is required to clear the goods for export. This term should
only be used for sea or inland waterway transport. |
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