The Incoterms rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. They help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers to buyers. Below you can find out what they mean and use them during conversation with our Trade Specialists.

EXW – Ex Works – Can be used for any transport mode, or where there is more than one transport mode. Means that the seller makes the goods available at his/her premises. The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.

FCA – Free Carrier – Can be used for any transport mode, or where there is more than one transport mode. Means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place.

FAS – Free Alongside Ship – Use of this rule is restricted to goods transported by sea or inland waterway. Seller delivers goods, cleared for export, alongside the vessel at a named port, at which point risk transfers to the buyer. The buyer is responsible for loading the goods and all costs thereafter.

FOB – Free on Board – Use of this rule is restricted to goods transported by sea or inland waterway. Means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures. The seller must advance government tax in the country of origin as of commitment to load the goods on board a vessel designated by the buyer. Once the goods have been loaded on board, risk transfers to the buyer, who bears all costs thereafter.

CFR – Cost and Freight – Use of this rule is restricted to goods transported by sea or inland waterway. Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Insurance for the goods is NOT included.

CIF – Cost Insurance and Freight – Use of this rule is restricted to goods transported by sea or inland waterway. Seller arranges and pays for transport to named port. Seller delivers goods, cleared for export, loaded on board the vessel. However risk transfers from seller to buyer once the goods have been loaded on board, i.e. before the main carriage takes place. Seller also arranges and pays for insurance for the goods for carriage to the named port.

DAT – Delivered at Terminal – Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods, unloaded from the arriving conveyance, at the named place. Risk transfers from seller to buyer when the goods have been unloaded. “Terminal’ can be any place – a quay, container yard, warehouse or transport hub. The buyer is responsible for import clearance and any applicable local taxes or import duties.

DAP – Delivered at Place – Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods, ready for unloading from the arriving conveyance, at the named place.   (An important difference from Delivered At Terminal DAT, where the seller is responsible for unloading.). Risk transfers from seller to buyer when the goods are available for unloading; so unloading is at the buyer’s risk. The buyer is responsible for import clearance and any applicable local taxes or import duties.

CPT – Carriage Paid To – Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage to the named place, but not for insuring the goods to the named place.  However delivery of the goods takes place, and risk transfers from seller to buyer, at the point where the goods are taken in charge by a carrier.

CIP – Carriage and Insurance Paid To – Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage to the named place, and also for insuring the goods. Terminal Handling Charges (THC) are charges made by the terminal operator. These charges may or may not be included by the carrier in their freight rates – the buyer should enquire whether the CPT price includes THC, so as to avoid surprises.