Incoterms

Incoterms means International Commercial Terms, these are a commercial terms that were published by the International Chamber of Commerce and are used by most of the commercial transactions.

The incoterms determine the price, the delivery place of the merchandise, who makes the contract and pays the shipping, who pays the shipping the documents of each part and its cost.

The following are the incoterms which are divided in the first 7 in any Mode or Modes of Transport and 4 in Sea and Inland Waterway Transport Only:

CIP – Carriage and Insurance Paid to (named place of destination

The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.

DAT – Delivered at Terminal (named terminal at port or place of destination)[

Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.

DAP – Delivered at Place (named place of destination)

Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer. Import clearance = import duty and VAT and not the Import Customs Clearance.

EXW – Ex Works (named place of delivery)

The seller makes the goods available at his/her premises. The buyer is responsible for uploading. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and doesn't clear them for export. If the seller does load the goods, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale..

FCA – Free Carrier (named place of delivery)

The seller delivers goods, cleared for export, to the buyer-designated carrier at a named and defined location. This is used for any mode of transport. The seller must load goods onto the buyer's carrier. The key document signifying transfer of responsibility is receipt by carrier

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