Incoterms

Presented by:
Bhanupriya (61)
Mohit (60)
Anuj (63)
Aarushi (64)
 Buyer has to take the responsibility
Very large or Very small exporters use EXW
Can be used for any transport mode
Monopoly company uses EXW
Seller has to take the responsibility
Risk transfers from seller to buyer
when the goods are made available
to the buyer
Can be used for any transport mode
 e FOB Free On Board named port of shipment (Ship only).

The seller fulfills his obligation to deliver when the goods are placed on board a ship
at the named port of shipment. All costs from that point forward, including freight
and insurance, are for the buyers account.
Carriage - To be arranged by the seller.
Cost transfer - From the seller to the buyer when the goods pass the
ship rail.
The buyer bears all costs and risks of loss or damage to the goods from that point
Seller delivers when goods, cleared for export, pass the ships rail at the named
port of shipment.
 FOB
Free On Board(named port of shipment)
SELLER BUYER

Seller/ Export Delivered Loading Onboard Discharging Delivery at Import Buyer/

Exporter Documents at named Port of Ship Port of named place of Documents Importer
Premises Formalities place of: Shipment Rail Arrival destination: Formalities Premises
Frontier/ Plane Frontier/
Terminal/ Ships Ships Terminal/Quay
Quay Rail Rail
Sellers Risks Buyers
Risks

Sellers Cost Buyers Cost

5
e CFR Cost & Freight named point of destination (Ship only).

The seller must pay the costs and freight to bring the goods to the named
destination, but the risk of loss or damage are transferred from the seller to
the buyer when the goods pass the ships rail in the port of shipment.
The seller pays the costs and freight necessary to bring goods to port of
destination, but the buyer bears the risk of loss and additional costs
occurring after delivery.
Carriage - To be arranged by the seller.
Cost transfer At port of destination, buyer paying such costs as are
not for the sellers account under the contract of carriage.
Example CFR SINGAPORE
 CFR
Cost and Freight (named port of destination)
SELLER BUYER

Seller/ Export Delivered Loading Onboard Discharging Delivery at Import Buyer/

Exporter Documents at named Port of Ship Port of named place of Documents Importer
Premises Formalities place of: Shipment Rail Arrival destination: Formalities Premises
Frontier/ Plane Frontier/
Terminal/ Ships Ships Terminal/Quay
Quay Rail Rail
Sellers Risks Buyers Risks

Sellers Cost Buyers Cost

7
 e CIF Cost, Insurance & Freight named port of destination (Ship
only).

The seller delivers when the goods pass the ships rail in the port of
shipment. The seller must pay the costs and freight necessary to bring the
goods to the named port of destination, but the risk of loss or damage are
transferred to the buyer.
Carriage - Carriage and insurance to be arranged by the seller.
Cost transfer At port of destination, buyer paying such cost as are not
for the sellers account under the contract of carriage.
 CIF
Cost, Insurance and Freight (named port of destination)
SELLER BUYER

Seller/ Export Delivered Loading Onboard Discharging Delivery at Import Buyer/

Exporter Documents at named Port of Ship Port of named place of Documents Importer
Premises Formalities place of: Shipment Rail Arrival destination: Formalities Premises
Frontier/ Plane Frontier/
Terminal/ Ships Ships Terminal/Quay
Quay Rail Rail
Sellers Buyers Risks
Risks

Sellers Buyers Cost

Costs

9
 DAT

Delivered at Terminal
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 any place, whether covered or not, such as
a quay, warehouse, container yard or road, rail or air cargo
terminal.
The seller bears all risks involved in bringing the goods to and
unloading them at the terminal at the named port or place of
destination.
 Sellers obligation is fulfilled and risk of loss passes at same
time: when the goods are unloaded at the arriving terminal
and placed at buyers disposal
Can specify a point within the terminal at which time the
obligation is complete
Seller clears goods for export but not for import
No requirement of insurance
If the intention is to carry sellers obligation further into
buyers country, use DAP or DDP
 DAP

Delivered at Place
Seller delivers when the goods are placed at the disposal of the
buyer on the arriving means of transport ready for unloading
at the named place of destination.
The seller bears all risks involved in bringing the good to the
named place.
Much like DAT, but with additional obligation by seller into
country of delivery
Goods are placed at buyers disposal at named location ready
for unloading; risk passes at that point
Seller clears goods for export but not import (use DDP if intent
is to require seller to clear goods for import also).
No obligation on seller to purchase insurance
 DDP
Delivered Duty Paid
Seller delivers the goods when the goods are placed at the disposal of
the buyer, cleared for import on the arriving means of transport
ready for unloading at the named place of destination.
The seller bears all the costs and risks involved in bringing the goods
to the place of destination and has an obligation to clear the goods
not only for export but also for import, to pay any duty for both
export and import and to carry out all customs formalities.
Like DAP, but including sellers obligation to clear goods for import
pay for any necessary licenses
Maximum obligation for seller

If seller is not well-suited to clear goods for import, DAP should be

used
No obligation to pay for insurance
 FAS

Free Alongside Ship

Seller delivers when the goods are placed alongside the ship
nominated by the buyer at the named port of shipment.
The risk of loss of or damage to the goods passes when the
goods are alongside the ship, the buyer bears all costs from the
moment onwards.
Usage: FAS Chennai, TN,INDIA(Incoterms 2010)

Seller is obligated to clear goods for export but not import

Seller has no obligation to pay for contracts of carriage or

insurance but may contract for carriage and must assist buyer
by providing necessary information for insurance
FCA Free Carrier
"Free Carrier" means that the seller fulfils his obligation to deliver when he has
handed 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.

This is used for any mode of transport.

CPT Carriage Paid To
This term is used for all kind of shipments.
Carriage paid to means that the seller pays the freight for the carriage of
the goods to the named destination. The risk of loss of or damage to the goods,
as well as any additional costs due to events occurring after the time the goods
have been delivered to the carrier is transferred from the seller to the buyer
when the goods have been delivered into the custody of the carrier.
CIP Carriage & Insurance Paid To

CIP can be used for any transport mode. The seller is responsible for arranging
carriage to the named place, and also for insuring the goods. Risk transfers from
seller to buyer, at the point where the goods are taken in charge by a carrier