INCOTERMS 2010

This is a brief guide to Incoterms 2010.  Incoterms are not law but a set of internationally agreed conditions that may be used to define the allocation of transportation and related costs between contracting parties.  If Incoterms are to be incorporated in to the sales contract it should be clearly stated to be Incoterms 2010 and include a designated point of transfer  EG FCA New York JFK Airport(Incoterms 2010). You should always ensure your cargo is adequately insured especially for sea freight where you may face "General Average" charges over and above any loss of cargo.

Incoterm All Modes

How to calculate the selling price

Packing

Loading at the sellers premises

Export customs formalities

Pre carriage

Handling at port of export

Main Carriage by  Air: Rail: Road: Ocean:

Insurance Coverage Main carriage

Handling at port of destination

Off-loading

Import Customs Formalities Duty & Taxes

On-Carriage

Buyers cost and responsibilities

Ex Works  (EXW)

Selling price of goods + Packing (according to contract made)

Appropriate packing by Seller unless otherwise contracted

Arrange all carriage from collection to destination including export and import Customs formalities Insure the cargo

Free Carrier *  (FCA)

EXW price + loading at your works plus export customs formalities (and pre carriage to designated place depending on contract)

Appropriate packing by Seller unless otherwise contracted

Arrange all carriage from designated FCA point to destination including import customs formalities. Insure the cargo

Carriage paid To * (CPT)

FCA cost + handling and freight port to port

Appropriate packing by Seller unless otherwise contracted

Unless otherwise contracted

Unless otherwise contracted

Arrange all Carriage from arrival of transport at designated Port including customs formalities. Insure the cargo

Carriage and Insurance Paid to * (CIP)

CPT price + Insure cargo to designated place

Appropriate packing by Seller unless otherwise contracted

Unless otherwise contracted

Unless otherwise contracted

Arrange unloading at designated point customs formalities and final delivery Insure cargo from designated port

Delivered at Terminal * (DAT)

CPT + off loading at Destination Terminal+ Insure cargo to designated place

Appropriate packing by Seller unless otherwise contracted

Arrange customs formalities and final delivery Insure cargo from designated port

Delivered at Place * (DAP)

CPT price + delivery to named destination + Insure cargo to designated place

Appropriate packing by Seller unless otherwise contracted

Arrange customs formalities and final delivery Insure cargo from designated place

Delivered Duty Paid * (DDP)

DAP + import customs formalities and duties Insure cargo to designated place

Appropriate packing by Seller unless otherwise contracted

Unload receive the cargo at designated place

Incoterms Ocean Only

Free Alongside Ship (FAS)

EXW + export Customs formalities and delivery alongside quoted vessel

Arrange loading to vessel and all costs of carriage from this point to destination including import customs formalities and cargo insurance

Free on Board (FOB)

FAS plus loading on board costs

Arrange l all costs of carriage from loaded at portt to destination including import customs formalities and cargo insurance

Cost and Freight (CFR)

FOB costs plus Port to port freight costs

Unless otherwise contracted

Unless otherwise contracted

Arrange all carriage from vessel arrival at designated port Insure the cargo

Cost, Insurance and Freight (CIF)

Price CFR + Insure cargo to designated port

Unless otherwise contracted

Unless otherwise contracted

Arrange all carriage and insure the cargo from vessel arrival at designated port

Cost allocation	Costs for Seller	Costs for Buyer	Cost for buyer or seller dependant on designated place
Insurance Risk	Risk for Seller	Risk for Buyer	Shared responsibility
Disclaimer.  This is a guide only if in doubt you should consult the relevant publication or take professional advice

Terms EXW,FCA,CPT,DDU & DDP Can be used for all modes of transport

Terms FOB CFR & CIF should be used for Sea and Inland waterway only.

Other terms are available and may be more applicable to your requirments.

It is generally accepted that the party who pays the Freight selects the Carrier.

#1 Named point. It is essential that a specific place is designated in the contract, if not for example on an export from the UK, FOB could mean any port in the UK The seller may be based in Liverpool but the buyer specify a carrier who sales from Southampton. The seller may not have calculated the cost of transport to Southampton into his selling price.

This page has been set out as a guide only full details are in the above mentioned publication available from your local Chambers of Commerce. The publication is very detailed as to the exact responsibilities of the contracting parties.