What do Incoterms mean?
Incoterms, created by the International Chamber of Commerce.
Incoterms are rules set which defines the terms of trade for the sale of goods all around the world.
It is a standardized framework that outlines the terms of international trade when it comes to the sale of goods..
They act as a common global trade language, providing you with the tools to navigate the import and export of goods with international counterparts more effectively.
What Incoterms do cover?
- They do define the obligations and costs between a buyer and seller
- They do define the point at which the risk for cargo passes between buyer and seller
What Incoterms don't cover?
- They don't cover the passage of title or ownership
- They don't cover payment - this is negotiated separately.
- They don't cover insurance - only two Incoterms, CIF and CIP outline insurance as the seller’s responsibility.
Door to Door Shipment
Incoterms
EXW (Ex Works)
Established importers set up offices in their export country for ease of handling their shipments. The buyer may opt for Ex Works if they are shipping via air express couriers. In most cases, express couriers collect goods from seller’s location.
.png){kind=icon}
FCA(b) (Free Carrier)
FCA can be a useful Incoterm® for purchasers who frequently acquire containerized goods and who have a reputable third-party logistics provider or freight forwarder they can trust.
FAS (Free Alongside Ship)
FAS has its roots in the era of sail-powered shipping. Nowadays, FAS is solely utilised for inland canal shipments and sea freight.
FOB (Free On Board)
FOB Incoterm® is also the most economical choice because it provides the buyer the freedom to compare shipping costs.
CFR (Cost And Freight)
The best applications for CFR Incoterm® are in inland waterway and ocean freight. It is generally utilised for bulk cargo and non-containerized commodities.
CIF (Cost, Insurance and Freight)
Only sea and waterway shipments should use CIF Incoterm®. The seller transfers the shipment and all risks to the buyer as soon as the cargo is loaded aboard the ship.
CPT (Carriage Paid To)
CPT is similar to an FCA agreement in that it can be applied to all modes of transportation, but unlike an FCA agreement, the delivery destination is not predetermined.
CIP (Carriage & Insurance Paid To)
CIP can be applied to any transport mode or situations when there are several transport modes. The seller is in charge of organising transportation to the specified location as well as insurance for the items.
DPU (Delivered at Place Unloaded)
The most recent Incoterm® as of now is DPU. Until the products have been delivered to the agreed-upon location and have been unloaded, the seller is responsible for all risks of loss or damage.
DAP (Delivered at Place)
The DAP Incoterm® can provide a brilliant solution if the buyer is buying things being imported into several nations, which might reduce the freight costs.
DPU (Delivered at Place Unloaded)
The most recent Incoterm® as of now is DPU. Until the products have been delivered to the agreed-upon location and have been unloaded, the seller is responsible for all risks of loss or damage.
We offer a free call consultation
Get the solution for all your Import-Export problems from Industry Experts
Afleo is a professional consulting firm providing consulting, documentation and representation with authorities for exporters and importers, global or international companies with business interests in India.
Useful Link
- Incoterms
- Commodity
- Shipping Terms
- FAQ
Useful Link
- About FCL
- About LCL
Contact us
Unit No. 207, Centrum IT Park, Wagle Estate, Thane West, Mumbai, Maharashtra 400604
