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.
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.
This interpretation is provided as a guide only.
Please feel free to print this summary of Incoterms 2010.
2010: Expanded Summary
Incoterm must be accompanied by a "named place"
ex. "FOB Sydney", "EXW Tahiti"
Jump to: EXW FCA CPT CIP DAT DAP DDP FAS FOB CFR CIF
|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.
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.
(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.
(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.
(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.
- 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
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
(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.
- 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
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
is responsible for effecting customs clearance, and paying
any customs duties
(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.
(Free Alongside Ship - named port of shipment)
The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo.
(Free On Board - named port of shipment)
The seller must load themselves the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel (this rule is new!). The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments.
(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.
(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.