International Commercial Terms

Do you know what INCOTERMS are? Do you know the different types of INCOTERMS there are?

Subject: The 10 Types of INCOTERMS

Date: 16-May-2012 Source: QuimiNet

Maritime Cargo Transportation

INCOTERM CPT - Carriage Paid To (named place of destination)

The seller pays the costs of freight transport required to carry the goods to the place agreed with the buyer, including shipping and export permits, but not insurance costs.

This INCOTERM can be used in any mode of transport, including multimodal transport, with the risk passing from seller to buyer when delivered to the first carrier.

INCOTERM DAF - Delivery at Frontier - (named place)

The seller delivers to the agreed place at the border, but liability ends before the delivery is cleared at customs and the goods are available to the buyer in the means of transport. It is the buyer’s responsibility to unload them. The term "border" could imply that of the exporting country, therefore this term must be specified.

This INCOTERM can also be used for any mode of transport when the border is on land. If the delivery is in a port, dock or aboard ship, the INCOTERMs that should be used are DES or DEQ.

INCOTERM DDP - Delivery Duty Paid (... named place of destination)

The seller delivers the goods to the buyer, cleared for export and import payments of all costs but without unloading from the means of transport at the place of destination in the importing country.

Additionally, the seller must cover all costs including taxes and risks for delivery to the importing country. This term is used for any mode of transport.

INCOTERM DDU - Delivery Duty Unpaid - Delivered Duty Unpaid (... named place of destination)

The seller fulfills his obligation when he delivers the goods at the place of destination, but he does not pay for customs charges and the unloading of the goods.

The seller bears the costs and risks of bringing the goods to the place of destination. The buyer is responsible for import duties and the risks and costs for delays in the delivery. If the buyer wants these risks and costs covered by the seller, this must be specified in the contract.

This term can be used in any mode of transport.

INCOTERM DEQ - Delivery Ex Quay - Delivered Ex Quay (... named port of destination)

The shipment is considered delivered by the seller when the goods are placed on the dock of the port of destination and are made available to the buyer, but before they are cleared for import at customs.

This term can be used in maritime, inland waterway and multimodal where the last mode of transport by water.

INCOTERM DES - Delivery Ex Ship - Delivered Ex Ship (... named port of destination)

The seller is considered to have delivered the goods when they are on board the vessel at the port of destination and available to the buyer, but before they are cleared for import at customs. The buyer assumes the costs and risks of unloading the product.

This term can be used in maritime, inland waterway or multimodal where the last mode of transport is by water.

INCOTERM EXW - Ex Works – FACTORY

This INCOTERM applies to transactions in which the seller (exporter) has complied with the responsibility to deliver the goods while they are still in his establishment (e.g., factory, workshop, warehouse, etc.) The goods are made available to the buyer (importer) but have not been cleared for export or loaded on the vehicle provided by the buyer.

The buyer (importer) must bear all costs and risks of taking the goods from the address of the seller (exporter) to the desired destination.

This INCOTERM is the only one in which customs export procedures are paid by the buyer (importer). That is, the buyer not only makes a purchase in the country of origin for the goods but also takes responsibility for documentation procedures necessary for export. This INCOTERM represents the minimum obligation for the seller.

The liability of the seller (exporter) is reduced to providing properly packaged and wrapped goods, such that the delivery of the goods can take place and the costs and risks transfer to the buyer (importer).

This term should not be used when the buyer cannot directly or indirectly carry out the export procedures. In such circumstances, the FCA term should be used.

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