INCOTERM 2010

Incoterms

Facilitate international commerce by promoting common and precise understanding between a seller and buyer of their respective operational obligations, costs and passage of risk of cargo loss or damage under various specified delivery arrangements. Citing a particular Incoterm in a sales contract will also aid transportation intermediaries, banks, and service providers involved in shipping or financing the goods better performing their functions. The incoterms can be define with two types which is rules for any mode of transportation and rules for sea and inland waterway transport. Rules for any mode including EXW, FCA, CPT, CIP, DAT, DAP and DDP. Rules for sea and inland waterway transport including FAS,FOB,CFR and CIF.

EXW

Ex works, the Incoterm delivery term under which the seller is responsible only for making the goods available at his designated premises for pick up by the buyer or buyer’s designated transportation carrier. Upon release of the goods to the buyer or carrier, the seller has no further responsibilities all costs and risks of transportation transfer to the buyer

FCA

FCA shippers facility, is the appropriate delivery term for situations in which the shipper will load an intermodal container, truck trailer, rail car, barge. The seller is not responsible for the cost of unloading the conveyance at the named destination point, no for transfer of the goods to the on carrier. For example, if the FCA point is an ocean carrier and or inland waterway terminal the buyer is responsible for unloading the incoming FCA conveyance. See also FOB under which the seller is additionally responsible for the cost of loading the vessel. Under FCA terms, the seller has no obligation to insure the shipment.

CPT

Carriage paid to the Incoterm under which the seller is responsible for arranging transportation and paying the freight for goods to a named point typically in the destination country. However, that the seller has fulfilled his obligation when he has tendered the goods to the transportation carrier who under the contract of carriage will accomplish this transportation to the named point. Typically in the origin country  the buyer assumes the risk of loss of the goods and or unforeseeable costs. This Incoterm may be used with any transportation mode including through multimodal movements. Under CPT terms the seller has no obligation to insure the shipment.

CIP

Carriage and insurance paid to the Incoterm under which the seller is responsible for arranging and paying for both the transportation of the goods and shipping insurance through to a named destination point, typically in the destination country.This Incoterm may be used with any transportation mode, including cargo to be shipped in intermodal containers aboard a container vessel, and through multimodal movements. For cargo shipped loose or in bulk via vessel, CIF would typically be used instead of CIP for port-to-port ocean or inland waterway shipments where seller was to provide insurance.

DAT

DAT terms, the seller assumes the cost and risk of unloading at the named destination terminal, where as the buyer is responsible for customs clearance. This term may be used with any transportation mode, including through intermodal transportation, and for international as well as domestic sales transactions.

DAP

Under DAP terms, the buyer assumes the cost and risk of unloading at the named destination place and for customs clearance. This term may be used with any transportation mode, including through intermodal transportation, and for international as well as domestic sales transactions.

DDP

Under DDP terms, the seller has no obligation to insure the shipment. This Incoterm may be used with any transportation mode or combination of modes.

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