Each Incoterm is referred to by a three-letter abbreviation.

Some of the main ones used in our industry are

defined below.




EXW (Ex Works)
The seller is not obliged to load the goods into the
truck or container, nor does it oblige the seller to
fulfil the necessary export customs formalities.
FCA (Free Carrier)
The seller/exporter is responsible for loading the
goods and providing export documentation.
FAS (Free Alongside Ship)
The seller delivers the goods, cleared for export, at
a named port of shipment. The buyer pays for the
THC incurred at the terminal.
FOB (Free On Board)
The seller clears the good for export, and pays for
the THC at a named port.
CFR (Cost And Freight)
The seller pays for the main carriage of good to
named destination port, but the buyer is liable for
loss and damage during transportation and should
be properly insured.
CIF (Cost, Insurance And
Freight)
The seller has to provide marine insurance against
the buyer's risk of loss and damage during


transportation.
CIP (Carriage And
Insurance Paid To)
The delivery of goods and the cargo insurance to
the named place of destination (discharge) at
seller's expense. Buyer assumes the import
customs clearance, payment of customs duties
and taxes, and other costs and risks.
DDU (Delivered Duty
Unpaid)
Buyer pays for duties and customs clearance.
DDP (Delivered Duty Paid)
Seller pays both duties and customs clearance.
Note: Whether wine and spirits excise tax is
included or not must be specifically agreed as
these are not part of the import duties.


All Incoterms include a 'named place', which is extremely important to in the agreement. If the terms are
EXW or FCA, the named place is the loading location. For FAS and FOB, it is the port of loading, while for CFR
and CIF, it is the destination port. For CIP, DDU and DDP the final delivery address is the named place.

Reference : http://en.wikipedia.org/wiki/Incoterm