incoterms 2010 - illustrated guide

The World Trade Press Illustrated Guide to

INCOTERMS2010A comprehensive guide to the 11 INCOTERMS 2010

Professional Industry Report

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2 World Trade Press

Copyright 2004-2010 by World Trade Press. All Rights Reserved. www.WorldTradePress.com

World Trade PressIllustrated Guide to Incoterms 2010*

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Copyright NoticesWorld Trade Press Illustrated Guide to Incoterms 2010 Copyright 2000-2010 by World Trade Press. All RightsReserved. Reproduction or translation of any part of thiswork without the express written permission of thecopyright holder is unlawful. Requests for permissionsand/or translation or electronic rights should be ad-dressed to Publisher at the above address.

Additional Copyright and Trademark NoticesIncoterms is a registered trademark of the InternationalChamber of Commerce (ICC), Paris, France and is usedhere for informational purposes only. The text of Inco-terms 2010 is 2010 by ICC Publishing S.A. The full textof Incoterms 2010 is contained in ICC publication No.715, ISBN 978-92-8420080-1. In the USA contact ICCPublishing, Inc., 1212 Avenue of the Americas, 21st Floor,New York, New York 10036, Tel: +[1] (212) 703-5066,www.iccbooksusa.net. ICC HQ are ICC Publishing S.A.,38 Cours Albert, 1er, 75008 Paris, France, Tel: +[33] (1)49 53 28 28, www.iccbooks.com. *This World Trade Press Illustrated Guide to In-coterms 2010 is independently authored andpublished and is not sponsored or endorsed by, oraffiliated with, the ICC.

CONTENTS

Introduction to Incoterms 2010 . . . . . . . . . . . . . . . . . . . 3Incoterm Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Incoterm Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Important Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Notes on Incoterms 2010 . . . . . . . . . . . . . . . . . . . . . . . . 5

E TERMSDeparture Terms

EXWEx Works(. . . named place of delivery) . . . . . . . . . . . . . . . . . . . . . 6

F TERMSMain Carriage Unpaid Terms

FCAFree Carrier(. . . named place of delivery) . . . . . . . . . . . . . . . . . . . . . 8FASFree Alongside Ship(. . . named port of shipment) . . . . . . . . . . . . . . . . . . . . 10FOBFree On Board (. . . named port of shipment) . . . . . . . . . . . . . . . . . . . . 12

C TERMSMain Carriage Paid Terms

CFRCost and Freight (. . . named port of destination) . . . . . . . . . . . . . . . . . . 14CIFCost, Insurance and Freight (... named port of destination) . . . . . . . . . . . . . . . . . . . 16CPTCarriage Paid To (. . . named place of destination) . . . . . . . . . . . . . . . . . . 18CIPCarriage and Insurance Paid To (. . . named place of destination) . . . . . . . . . . . . . . . . . . 20

D TERMSArrival Terms

DATDelivered At Terminal (. . . named terminal at port or place of destination) . . 22DAPDelivered At Place(. . . named place of destination) . . . . . . . . . . . . . . . . . . 24DDPDelivered Duty Paid (. . . named place of destination) . . . . . . . . . . . . . . . . . . 26

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The World Trade PressIllustrated Guide to Incoterms 20101

While the terms of sale in international business sound sim-ilar to those used in domestic contracts, they often have dif-ferent meanings. Confusion over these terms can result indiminished profits or lost sales. IncotermsBy the 1920s, international traders had developed a set oftrade terms to describe their rights and obligations with regardto the sale and transport of goods. These terms consisted ofshort abbreviations for lengthy contract provisions. Unfortu-nately, there was no uniform interpretation of these terms.To improve this aspect of international trade, the Interna-tional Chamber of Commerce (ICC) in Paris developed In-coterms (INternational COmmercial TERMS), a set ofuniform rules for the interpretation of terms defining thecosts, risks, and obligations of buyers and sellers in interna-tional transactions. First published in 1936, these rules havebeen periodically revised to account for changing modes oftransport, document delivery, and security. Incoterms 2010In late 2010 the ICC issued its latest revision, Incoterms2010. Please note:1. The new rules enter into force on January 1, 2011.2. Contracts are interpreted by the version of Incoterms

referred to in the contract. Therefore, only a contractthat refers to Incoterms 2010 will be governed by rulesfrom that version.

Incoterms 2010 vs. Incoterms 2000Incoterms 2010 rules incorporate a number of changes fromIncoterms 2000. Here are some key items:1. Incoterms 2000 had 13 rules whereas Incoterms 2010

has 11 rules. For Incoterms 2010, four of the D rules:DAF, DES, DEQ, and DDU were dropped, and twonew D rules were created: DAT and DAP

2. In Incoterms 2000, a number of rules, such as FOB, es-tablished that the seller delivers the goods when theypass the ships rail. In Incoterms 2010 these rules re-quire that the goods be delivered on board the vessel.

3. Incoterms 2000 established four groups of rules: E: Departure, F: Main Carriage Unpaid, C: Main Car-riage Paid, and D: Arrival. Incoterms 2010, however, es-tablishes two classes: 1) rules applicable for all modes oftransport, and 2) rules applicable only for sea and inlandwaterway transport. See the next page for details.

4. Incoterms 2010 gives electronic communications the samestatus as paper communication so long as the parties agree.

5. Incoterms 2010 rules obligate both seller and buyer togive assistance in securing security clearances.

6. Incoterms 2010 now acknowledges the existence ofstring sales, where goods in transit may be sold mul-

tiple times before arrival, by giving the seller the optionto procure goods shipped.

Use of IncotermsIncoterms are not laws enacted by governments. Rather,they are rules agreed to by parties to a contract. Also, Incoterms are not implied into contracts for the sale ofgoods. If you desire to use Incoterms, you must specificallyinclude them in your contract. Your contract should expresslyrefer to a specific version of Incoterms. For example:

CIF Oakland, California, USA, Incoterms 2010Incoterms Do . . .Incoterms 2010 may be included in a sales contract if theparties desire the following:1. To complete a sale of goods.2. To indicate each contracting partys costs, risks, and obli-

gations concerning these aspects of delivery:a. When is the delivery completed?b. How does a party ensure that the other party has metthe standard of performance?c. Which party must obtain requisite licenses and complywith government-imposed import/export formalities?d. What are the modes and terms of carriage?e. What are the delivery terms?f. When is the risk of loss transferred from the seller tothe buyer?g. How will transport and other costs be divided be-tween the parties?h. What notices are the parties required to give to eachother regarding the transport and transfer of the goods?

3. To establish basic terms of transport and delivery in ashort format.

Incoterms Do Not . . .Incoterms 2010 are not sufficient on their own to expressthe full intent of the parties. They do not:1. Apply to con tracts for services.2. Define contractual rights and obligations other than for

delivery.3. Specify details of the transfer, transport, and delivery

of the goods.4. Determine how title to the goods will be transferred.5. Protect a party from risk of loss.6. Define the remedies for breach of contract.Illustrated Guide to Incoterms 2010The World Trade Press Illustrated Guide to Incoterms2010 was designed to give a graphic representation of thebuyers and sellers risks and costs under each of the 11 In-coterms. The material on each facing page gives a summaryof seller and buyer responsibilities.

1. Incoterms is a registered trademark of the International Chamber of Commerce (ICC), and is used here for informational purposes only.This illustrated guide is independently authored and published and is not sponsored or endorsed by, or affiliated with the ICC. The fulltext of Incoterms 2010 (117 pages) is contained in ICC publication No. 715, ISBN 978-92-8420080-1. Contact ICC Publishing, Inc.,1212 Avenue of the Americas, 21st Floor, New York, NY 10036 USA, Tel: +[1] (212) 703-5066, www.iccbooksusa.net, or ICC Publish-ing S.A., 38 Cours Albert, 1er, 75008 Paris, France, Tel: +[33] (1) 49 53 28 28, www.iccbooks.com. The World Trade Press Illustrated Guide to Incoterms 2010 is 2000-2010 by World Trade Press.

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Incoterms GroupsIn the past, Incoterms were arranged into four groups: E (Departure), F (Main carriage unpaid), C (Main carriagepaid), and D (Arrival). Traders, however, were mistakenlypicking ocean transport terms (like FOB) for shipments byair. Incoterms 2010 classifies terms by mode of transport,but the four original groupings remain valid:

Incoterms ClassesAs mentioned, picking an inappropriate term can presentproblems. The pages describing individual Incoterms willassist you in making the right choice, but for the moment,you should know that some terms are applicable for allmodes of transport, while others are applicable only for seaand inland waterway transport.

Incoterms 2010 GroupsGroup EDeparture

EXW EX Works(...named place of delivery)

Group FMainCarriage Unpaid

FCA Free CArrier (...named place of delivery)

FAS Free Alongside Ship(...named port of shipment)

FOB Free On Board(...named port of shipment)

Group CMainCarriage Paid

CFR Cost and FReight(...named port of destination)

CIF Cost Insurance and Freight(...named port of destination)

CPT Carriage Paid To(...named place of destination)

CIP Carriage and Insurance Paid To(...named place of destination)

Group DArrival

DAT Delivered At Terminal(...named terminal at port or place of destination)

DAP Delivered At Place(...named place of destination)

DDP Delivered Duty Paid(...named place of destination)

Incoterms 2010 ClassesAll modes of transport including multimodal

EXW EX Works(...named place of delivery)

FCA Free CArrier(...named place of delivery)

CPT Carriage Paid To(...named place of destination)

CIP Carriage and Insurance Paid To(...named place of destination)

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

DAP Delivered At Place(...named place of destination)

DDP Delivered Duty Paid(...named place of destination)

Sea and inland waterway transport only

FAS Free Alongside Ship(...named port of shipment)

FOB Free On Board(...named port of shipment)

CFR Cost and FReight(...named port of destination)

CIF Cost Insurance and Freight(...named port of destination)

DefinitionsdeliveryIn common usage, delivery is the act ofdelivering something, while the place of delivery is of-ten the buyers place of business. In Incoterms 2010,however, delivery is the point where the risk of lossor damage passes from the seller to the buyer. This isoften the named port or place but not necessarily thebuyers place of business.pre-carriageThe initial transport of goods from thesellers premises to the main port or place where main car-riage begins. Usually by truck, rail, or inland waterway.main carriageThe primary transport of goods, gen-erally for the longest part of the journey and generallyfrom one country to another. Usually by sea vessel orby airplane, but also by truck, rail, or inland waterway.onward carriageTransport from the port, terminal, orplace of arrival in the country of destination to the buyerspremises. Usually by truck, rail, or inland waterway.

multimodalUse of more than one mode of transport(road, rail, sea, air) to transport goods (or people) from ori-gin to final destination.carrierIn common usage, a carrier is a firm thattransports goods or passengers for hire, rather than sim-ply arranging for such transport. In Incoterms, however,the carrier can be any person or firm who by contractundertakes to perform or procure such services. Thebuyer nominates the carrier and the seller need onlyaccept the nomination for the term to work.string saleThe sale, and successive resale, of a singleshipment of goods while en route from place of shipmentto final destination. This is common in the commoditytrade, where oil, grain, and ore shipments are sold and re-sold before the vessel arrives in port. A number of Inco-terms now take this practice into account by giving theseller the option to procure goods already so delivered.

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Notes on Incoterms1. Underlying ContractIncoterms were designed to

be used within the context of a written contract for thesale of goods (not services). Incoterms, therefore, re-fer to the contract of sale, rather than the contract ofcarriage of the goods. Buyers and sellers should spec-ify that their contract be governed by Incoterms 2010.

2. Two ComponentsEach Incoterm has two compo-nents: the term name, and a named place, port, or termi-nal. For example: EXW, Sellers warehouse located at___. Or, DDP, Buyers warehouse located at ___. AnIncoterm is incomplete without both components.

3. Precise Point of DeliveryIn addition to a specificnamed port, place, or terminal, it may be neces-sary to name a precise point of delivery. For exam-ple, the original terms of sale may state CFR Port ofRotterdam. The Port of Rotterdam, however, ishuge. The buyer who prefers a particular point withinthe port should name the specific point in the salescontract and in the trade term. This may be an impor-tant issue in situations where the buyer is responsiblefor unloading, storage, and other charges once thegoods have been made available at the named place.In some cases it may not be possible for the buyer toname the precise point of delivery at the time of con-tract. However, if the buyer does not do so in a timelymanner, the seller may make delivery within a rangeof places that is within the terms of the contract, butinconvenient for the buyer.

4. EXW and FCAThe buyer who purchases on ExWorks (EXW) or Free Carrier (FCA) terms will needto arrange for the contract of carriage. Also, since theseller will not receive a bill of lading, using a letter ofcredit requiring a bill of lading will not be possible.

5. EDI: Electronic Data InterchangeIt is increas-ingly common for sellers to prepare and transmit doc-uments electronically. Incoterms provide for EDI andelectronic documents so long as buyers and sellersagree on their use in the sales contract.

6. Insurable InterestIn most cases, neither the buyernor the seller is obligated to provide insurance. In fact,only two Incoterms mention insurance: CIP and CIF.In both cases the seller is obligated to secure insur-ance for the buyer, but only for minimum coverage.The seller and buyer, however, may have insurableinterest in the goods, and prudence may dictate pur-chase of insurance coverage or additional insurancecoverage.

7. Customs of the Port or TradeIncoterms are anattempt to standardize trade terms for all nations andall trades. However, different ports and differenttrades have their own customs and practices. It is bestif such practices are specified in the sales contract.

8. Export/Import Customs ClearanceIt is usuallydesirable that export customs formalities be handled bythe seller and import customs formalities be handled bythe buyer. However, some trade terms (such as EXW)require that the buyer handle export formalities, whileothers, such as DDP, require that the seller handle im-port formalities. In each case, the buyer and seller will

have to assume risks and costs associated with exportand import formalities and duties. In some cases, for-eign exporters may not be able to obtain import licensesin the country of import. Parties should research thepertinent local trade laws before using such terms.

9. Variants of Incoterms (Added Wording)Incoterms give no guidance regarding the addition ofwords to individual terms. In practice, the seller andbuyer may agree to added wording. For example, if theseller agrees to DDP terms, agreeing to pay for customsformalities and import duties but not for VAT (valueadded tax), the term DDP VAT Unpaid may be used.Adding wording to an Incoterm, however, may present arisk if the wording contradicts the fundamental meaningof the Incoterm itself. For example, if the seller agrees toCIF, seller responsible for unloading the aircraft, thereis an inherent problem, because CIF can only be used fortransport by sea or inland waterway. Use additionalwording only if you are certain that it is consistent withthe meaning of the term used.

10. PackingIt is the responsibility of the seller to providepackaging unless the goods shipped are conventionallyshipped unpackaged (commodities such as oil or grain). Inmost situations it is best if the buyer and seller agree in thesales contract on the type and extent of packing required.However, it may not be possible to know beforehand thetype or duration of transport. As a result, it is the responsi-bility of the seller to provide for safe and appropriate pack-aging, but only to the extent that the buyer has made thecircumstances of the transport known beforehand. If theseller is responsible for packing goods in an ocean or airfreight container, their responsibility includes stuffing thecontainer properly to withstand shipment.

11. InspectionThere are several issues related to inspec-tions: a) the seller is responsible for costs of inspection tomake certain the quantity and quality of the shipment arein conformity with the sales contract; b) pre-shipment in-spections as required by the export authority are the re-sponsibility of the party responsible for exportformalities; c) import inspections as required by the im-port authority are the responsibility of the party responsi-ble for import formalities; and d) third-party inspectionsfor independent verification of quality and quantity (if re-quired) are generally the responsibility of the buyer. Thebuyer may require such an inspection and inspectiondocument as a condition of payment.

12. Passing of Risks and CostsIn all E, F, and D terms,both risks and costs pass from seller to buyer at the namedplace, port, or terminal. In all C terms, however, the trans-fer of risks occurs at a different point than the transfer ofcosts. Refer to each term for details.

13. CarrierIn common usage, a carrier is a firm thattransports goods or passengers for hire, rather thansimply arranging for such transport. In Incoterms,however, carrier is the party with whom carriage iscontracted and can be any person or firm. In practice,the buyer nominates the carrier and the seller needonly accept the nomination. It is recommended thatthe carrier be named in the sales contract.

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EXWEx Works (. . . named place of delivery)

EXW, Ex Works (. . . named place of delivery)In Ex Works, the seller/exporter/manufacturer merelymakes the goods available to the buyer at the sellersnamed place of delivery, which is commonly, but notnecessarily, the sellers place of business. With EXW, the seller has no responsibility to load thegoods onto a truck or other transport vehicle or to clear thegoods for export. This trade term places the greatest re-sponsibility on the buyer and minimum obligations on theseller.The parties to the transaction, however, may stipulate that theseller be responsible for loading the goods onto a transport ve-hicle at the risk and cost of the buyer. Such a stipulation is avariant and must be made within the contract of sale.When using the FCA term, it is advisable to clearly specify in

the contracts of sale and carriage the precise point of delivery.The EXW term is generally not recommended for inter-national trade transactions, as loading the goods at thesellers named place and handling export formalities usu-ally places too much of a burden upon the buyer.If the buyer cannot handle loading the goods or exportformalities, the EXW term should not be used. In such acase, FCA is recommended.The EXW term is often used when making an initial quo-tation for the sale of goods. It represents the cost of thegoods without any other costs included.The EXW term is commonly used in courier shipmentswhen the courier picks up the shipment from clientspremises and loads couriers own truck.

Payment terms for Ex Works transactions are generallycash in advance and open account.

ExamplesEXW, ABC Factory, Full Address, Paris, FranceEXW, XYZ Printing Plant, Full Address, Singapore

Modes of TransportAirYesRailYesRoadYesSeaYesInland WaterwayYesMultimodalYes

Seller/ExporterNamed Place

ExportDocuments, Formalities, and Fees

Pre-Carriage to Named Place, Not Unloaded

Deliveryat Named Place/Port, Unloaded

Loading at NamedPlace/Port of Shipment

LoadedOn BoardShip orVessel

Transport by Air, Rail, Road, Water, orMultimodal

On Board Ship or Vessel, Not Unloaded

Discharging (unloading) at Named Place/Port of Destination

Delivery at Named Place/Terminal

Onward Carriage to Named Place, Not Unloaded

Import Documents, Formalities, and Duties

Buyer/Importer Named Place, Unloaded

CARRIAGE

RISKS

COSTS

SELLER BUYER

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EXWEx Works (. . . named place of delivery)Incoterm CategoryEXW specifies that the seller/exporter/manufacturer merelymakes the goods available to the buyer, not cleared for ex-port, at the sellers named place of delivery, which is com-monly, but not necessarily, the sellers place of business.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)

1. GoodsProvide the goods, commercial invoice, andother documentation as required by the sales contract.

2. Licenses, Security, and Customs FormalitiesProvide the buyer, at the buyers risk and cost, assis-tance in securing any license, documents, authoriza-tions, and security clearance required for the export ofthe goods.

3. Carriage and InsuranceThe seller has no obliga-tion to provide for carriage of goods or for insurance. Provide the buyer, at the buyers request and cost (ifany), information required to obtain insurance.

4. DeliveryMake the goods available to the buyer atthe named place and point of delivery at the time stipu-lated in the sales contract. If the buyer has not stipu-lated a specific point at the named place of delivery, theseller may pick one that suits sellers purposes.

5. Risk TransferAssume all risks of loss or damageto the goods until they have been made available to thebuyer at the named place of delivery, at the agreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been madeavailable to the buyer at the named place of delivery.

7. Notice to the BuyerProvide notice that enablesthe buyer to take delivery of the goods.

8. Delivery and Transport Document(s)The seller

has no obligation to provide the buyer with a deliverydocument.

9. Checking, Packing, MarkingPay all costs associ-ated with checking the quality and quantity of the goodsto be in conformity with the sales contract. Package the goods, unless the goods are conventionallysold unpackaged. Package the goods as the seller deemsappropriate for transport, unless the buyer has given spe-cific requirements prior to the finalization of the salescontract. Provide marking appropriate to the packaging.

10. OtherTimely provide the buyer, at the buyers requestand cost, with assistance in securing information and doc-uments, including security information, the buyer requiresfor export, transport, and import of the goods to the finaldestination.

Buyers Responsibilities (summary)1. PaymentPay for the goods as provided in the sales

contract.2. Licenses, Security, and Customs Formalities

Obtain any export and import licenses or authoriza-tions, and handle all export and import customs for-malities.

3. Carriage and InsuranceBuyer has no obligationto seller for carriage or insurance.Provide for carriage of the goods from the namedplace of delivery to the buyers destination.

4. Taking DeliveryTake delivery of the goods asprovided in the sales contract.

5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered (madeavailable) at the named place of delivery as providedin the sales contract. Assume all risk of loss or dam-age if the goods are not picked up at the agreed-upontime and place.

6. CostsPay all costs from the time the goods havebeen delivered (made available) at the named place ofdelivery. Pay all costs related to carriage of the goodsfrom the named place of delivery to the buyers finaldestination. Pay all costs resulting from failure to takedelivery at the named place and time. Pay all costs re-lating to export and import formalities, duties, fees,and taxes, and other charges including transshipment.

7. Notice to SellerIf, according to the sales contract,the buyer is entitled to specify a time for taking deliv-ery or the point of taking delivery at the named placeof delivery, to give seller sufficient notice.

8. Proof of DeliveryProvide the seller with evidenceof taking delivery.

9. Inspection(s)Pay for pre-shipment inspections in-cluding those required by the country of export.

10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, the buyer requires for ex-port and import formalities, security clearance, andtransport of the goods to the final destination.

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FCAFree Carrier (. . . named place of delivery)

FCA, Free Carrier (. . . named place of delivery)In Free Carrier, the seller/exporter/manufacturer clearsthe goods for export and delivers them to the carrierspecified by the buyer at the named place of delivery.If the named place of delivery is the sellers place of busi-ness, the seller is responsible for loading the goods ontothe transport vehicle. If the named place is any other loca-tion, such as the loading dock of the carrier, the seller is notresponsible for unloading.When using the FCA term, it is advisable to clearly specify inthe contracts of sale and carriage the precise point of delivery.Carrier has a special meaning. Technically, a carrier is afirm that itself transports goods or passengers for hire, ratherthan simply arranging for such transport. Examples are ashipping line, airline, trucking firm, or railway.

In the FCA term, however, the carrier can be any personwho by contract undertakes to perform or procure suchservices by any of the above methods of transport includ-ing multimodal. Therefore, a person, such as a freight for-warder, can act as a carrier. With the FCA term, thebuyer nominates the carrier, and the seller need only ac-cept the nomination for the term to work.The FCA term may be used for any mode of transport in-cluding multimodal.With FCA, the named place of delivery is domestic to thebuyer.The FCA term is often used when making an initial quo-tation for the sale of goods.

ExamplesFCA, ABC Shipping, Door 4, Full Address, Hamburg,GermanyFCA, XYZ Airlines Cargo Terminal, San Francisco In-ternational Airport (SFO), USA















CARRIAGE

RISKS

COSTS

SELLER BUYER

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FCAFree Carrier (. . . named place of delivery)Incoterm CategoryFCA is an F term specifying that the seller/exporter/manufacturer is responsible for delivering the goods tothe carrier, export cleared, at the named place of deliv-ery, but does not bear risk or costs afterwards.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)


2. Licenses, Security, and Customs FormalitiesObtain at own risk and cost all required export li-censes, documents, and authorizations and carry outexport formalities and procedures.

3. Carriage and InsuranceThe seller has no obliga-tion to provide for carriage of goods or for insurance.At the request of the buyer, the seller may contract forcarriage on standard industry terms at the buyers riskand cost. Provide information to enable the buyer to obtaininsurance.

4. DeliveryDeliver the goods to the carrier at thenamed place of delivery at the time stipulated in thesales contract. If the named place of delivery is thesellers place of business, the seller is responsible forloading the goods onto the transport vehicle. If thenamed place is any other location, such as the loadingdock of the carrier, the seller is not responsible for un-loading. If the buyer has not stipulated a specific pointat the named place of delivery, the seller may pick onethat suits sellers purposes.

5. Risk TransferAssume all risk of loss or damage tothe goods until they have been delivered to the carrierat the named place of delivery, within the agreed-upon

time stipulated in the sales contract.6. CostsPay all costs until the goods have been deliv-

ered to the carrier at the named place of delivery. Payall costs relating to export, including customs formal-ities, duties, and taxes.

7. Notice to the BuyerAt buyers risk and cost, pro-vide notice to the buyer that the goods have been de-livered to the carrier, or that the carrier did not takepossession of the goods at the agreed-upon time.

8. Delivery and Transport Document(s)Providethe buyer with a proof of delivery. At the buyers re-quest, if the proof of delivery is not a transport docu-ment, help the buyer obtain a transport document.

9. Checking, Packing, MarkingPay all costs associ-ated with checking the quality and quantity of the goodsto be in conformity with the sales contract. Provide pre-shipment inspections as required for export formalities.Package the goods, unless the goods are conventionallysold unpackaged. Package the goods as the seller deemsappropriate for transport, unless the buyer has given spe-cific requirements prior to the finalization of the salescontract. Provide marking appropriate to the packaging.

10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, the buyer requiresfor transport and import of the goods to the final destina-tion. Reimburse the buyer for buyers costs related to se-curing information and documents, including securityinformation the seller requires for export formalities andsecurity clearance of the goods.



Obtain any import licenses or authorizations and han-dle all import customs formalities.

3. Carriage and InsuranceProvide for carriage ofthe goods from the named place of delivery. Buyer has no obligation to the seller for insurance.


5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered to thecarrier at the named place of delivery. Assume all riskof loss or damage and other costs if the buyers carrierfails to take delivery at the agreed-upon time andplace.

6. CostsPay all costs for carriage and insurance fromthe time the goods have been delivered to the carrierat the named place of delivery. Pay all costs resultingfrom failure to take delivery at the named place andtime. Pay all costs relating to import formalities, du-ties, fees, and taxes, and other charges includingtransshipment.

7. Notice to SellerGive sufficient notice to the sellerof the name of the carrier, the delivery point, the timeor period for delivery, and the mode of transport.

8. Proof of DeliveryAccept the sellers delivery doc-ument if it is in conformity with the sales contract.

9. Inspection(s)Pay for pre-shipment inspections un-less such is required by the country of export.

10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed place of delivery.

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FASFree Alongside Ship (. . . named port of shipment)

FAS, Free Alongside Ship (. . . named port of shipment)In Free Alongside Ship, the seller/exporter/manufacturerclears the goods for export and places them alongside theship (on a dock or barge) at the named port of ship-ment.When using the FAS term, it is advisable to clearly specifyin the contract of sale, and in contracts of carriage, not onlythe named port of shipment, but also the precise loadingpoint at or within the named port of shipment. This is par-ticularly the case when the named port of shipment islarge and options abound for delivery points.With FAS, the seller has the option to deliver the goodsalongside the ship, or to procure goods already so deliv-ered. This is a reference to so-called string saleswhere a single shipment might be resold multiple times

during transport, as is common in the commodity trade.The FAS term is commonly used in the sale of bulk com-modity cargo such as oil, grains, and ore.If the shipment is containerized or to be containerized,common practice is to deliver the shipment to the carrierat a terminal and not alongside a ship. In such situations,the FCA term is recommended.The named place in FAS is a port, and therefore the term isused only for ocean or inland waterway transport.With FAS, the named port of shipment is domestic to theseller.Usual payment terms for FAS transactions are cash in ad-vance and open account, but letters of credit are alsoused.

ExamplesFAS, ABC Shipping Line, Dock #2, Port Elizabeth,South AfricaFAS, XYZ Shipping Line, Quay #4, Le Havre, France

Modes of TransportAirNoRailNoRoadNoSeaYesInland WaterwayYesMultimodalNo







Transport by Sea or Inland Waterway Only







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FASFree Alongside Ship (. . . named port of shipment)Incoterm CategoryFAS is an F term specifying that the seller/exporter is re-sponsible for delivering the goods, export cleared, along-side the ship, but does not bear risk or costs afterwards.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredUsed only for ocean or inland waterway transport.Sellers Responsibilities (summary)



3. Carriage and InsuranceThe seller has no obliga-tion to provide for main carriage of goods or for in-surance. At the request of the buyer, the seller maycontract for carriage on standard industry terms at thebuyers risk and cost. No obligation to provide insurance. Provide informationto enable the buyer to obtain insurance.

4. DeliveryDeliver the goods alongside the ship atthe named port of shipment, or procure the goods sodelivered, within the agreed-upon time stipulated inthe sales contract. If the buyer has not stipulated aspecific loading point at the named port of shipment,the seller may pick one that suits sellers purposes.

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered alongsidethe ship at the named port of shipment within theagreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been deliv-ered alongside the ship at the named port of shipment.Pay all costs relating to export, including customs for-malities, duties, and taxes.

7. Notice to the BuyerAt buyers risk and cost, pro-vide notice to the buyer that the goods have been de-livered alongside the ship at the named port ofshipment, or that the ship did not take possession ofthe goods at the agreed-upon time.

8. Delivery and Transport Document(s)Providethe buyer with a proof of delivery that the goods havebeen delivered alongside the ship at the named port ofshipment. At the buyers request, if the proof of deliv-ery is not a transport document, help the buyer obtain atransport document.


10. OtherTimely provide the buyer, at the buyers re-quest and cost, assistance in securing information anddocuments, including security information, required bythe buyer for transport and import of the goods to thefinal destination. Reimburse the buyer for buyers costsrelated to securing information and documents, includ-ing security information, the seller requires for exportformalities and security clearance of the goods to thenamed port of shipment.




3. Carriage and InsuranceProvide for loading andcarriage of the goods from the named port of shipment. Buyer has no obligation to the seller for insurance.


5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered along-side the ship at the named port of shipment as pro-vided in the sales contract. If the buyer nominates theship, assume all risk of loss or damage and costs if thenamed ship does not arrive on time, or if the ship failsto take the goods, or if sufficient notice is not given toseller regarding ship name, loading point, and time.

6. CostsPay all costs for carriage and insurance from thetime the goods have been delivered alongside the ship atthe named port of shipment. Pay all costs resulting fromfailure to take delivery at the named place and time. Payall costs relating to import formalities, duties, fees, andtaxes, and other charges including transshipment.

7. Notice to SellerIf the buyer nominates the ship, givesufficient notice to the seller of the name of the ship, theloading point, and the time or period for delivery.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed port of shipment.

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FOBFree On Board (. . . named port of shipment)

FOB, Free On Board (. . . named port of shipment)In Free On Board, the seller/exporter/manufacturer clearsthe goods for export and delivers them on board thenamed vessel at the named port of shipment.This is a change from Incoterms 2000, where the seller wasresponsible only to deliver the goods past the ships rail.With FOB, the seller has the option to deliver the goodson board the vessel, or to procure goods already so de-livered. This is a reference to so-called string sales,where a single shipment might be resold multiple timesduring transport, as is common in the commodity trade.The named place in FOB is a port and therefore the term isused only for ocean or inland waterway transport.With FOB, the named port of shipment is domestic to theseller.

If the shipment is containerized or to be containerized,common practice is to deliver the shipment to the carrierat a terminal and not on board a ship. In such situations,the FCA term is recommended.The FOB term is commonly used in the sale of bulkcommodity cargo such as oil, grains, and ore.The key document in FOB transactions is the On BoardBill of Lading.The named place in FOB is a port, and therefore the term isused only for ocean or inland waterway transport.Sellers and buyers often misuse the FOB term. FOB doesnot mean loading goods onto a truck or train at the sellersplace of business. FOB is used only in reference to deliver-ing the goods on board a ship in ocean or inland waterway

transport. The FCA term, on the other hand, is applicableto all modes of transport.

ExamplesFOB, ABC Shipping Line, Vessel XYZ, Buenos Aires,ArgentinaFOB, DEF Shipping Line, Vessel UVW, Gdansk, Poland















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FOBFree on Board (. . . named port of shipment)Incoterm CategoryFOB is an F term specifying that the seller/exporter isresponsible for delivering the goods, export cleared, onboard a ship, but does not bear risk or costs afterwards.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredUsed only for ocean or inland waterway transport.Sellers Responsibilities (summary)



3. Carriage and InsuranceThe seller has no obliga-tion to provide for main carriage of goods or for in-surance. At the request and cost of the buyer, theseller may contract for carriage on standard industryterms at the buyers risk and cost. No obligation to provide insurance. Provide informationto enable the buyer to obtain insurance.

4. DeliveryDeliver the goods on board the named ves-sel at the named port of shipment at the time stipulatedin the sales contract, or procure the goods so deliv-ered. If the buyer has not stipulated a specific loadingpoint at the named port of shipment, the seller maypick one that suits sellers purposes.

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered on boardthe ship at the named port of shipment, within theagreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been deliv-ered on board the vessel at the named port of ship-ment. Pay all costs relating to export, including

customs formalities, duties, and taxes.7. Notice to the BuyerAt buyers risk and cost, pro-

vide notice to the buyer that the goods have been de-livered on board the ship at the named port ofshipment, or that the ship did not take possession ofthe goods at the agreed-upon time.

8. Delivery and Transport Document(s)Providethe buyer with a proof of delivery that the goods havebeen delivered on board the ship at the named port ofshipment. At the buyers request, if the proof of deliv-ery is not a transport document, help the buyer obtaina transport document.


10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, required by thebuyer for transport and import of the goods to the finaldestination. Reimburse the buyer for buyers costs relatedto securing information and documents, including securityinformation the seller requires for export formalities andsecurity clearance of the goods to the ship at the namedport of shipment.




3. Carriage and InsuranceProvide for carriage ofthe goods from the named port of shipment. Buyer has no obligation to the seller for insurance.


5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered on board theship at the named port of shipment. If the buyer nominatesthe ship, assume all risk of loss or damage and costs if thenamed ship does not arrive on time, or if the ship fails totake the goods, or if sufficient notice is not given to sellerregarding ship name, loading point, and time.

6. CostsPay all costs for carriage and insurance fromthe time the goods have been delivered on board theship at the named port of shipment. Pay all costs re-sulting from failure to take delivery at the namedplace and time. Pay all costs relating to import for-malities, duties, fees, and taxes, and other charges in-cluding transshipment.

7. Notice to SellerIf the buyer nominates the ship, givesufficient notice to the seller of the name of the vessel,the loading point, and the time or period for delivery.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed port of shipment.

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CFRCost and Freight (. . . named port of destination)

CFR, Cost and Freight (. . . named port of destination)In Cost and Freight, the seller/exporter/manufacturer clearsthe goods for export and delivers them on board the ship atthe port of shipment (not destination). This is where riskpasses from seller to buyer.The seller, however, is responsible for contracting for andpaying the costs associated with transport of the goods to thenamed port of destination. This is where costs transferfrom seller to buyer.It is important to note that the transfer of risk from seller tobuyer occurs at a different point than the transfer of costs.When using the CFR term, it is advisable to clearly specifyin the contract of sale, and in contracts of carriage, not onlythe named port of destination, but also the precise point ator within the named port of destination.

With CFR, the seller has the option to deliver the goods onboard the vessel, or to procure goods already so deliv-ered. This is a reference to so-called string sales wherea single shipment might be resold multiple times duringtransport, as is common in the commodity trade.The named destination in CFR is a port, and therefore theterm is used only for ocean or inland waterway transport.If the shipment is containerized or to be containerized,common practice is to deliver the shipment to the carrierat a terminal and not on board a ship. In such situations,the CPT term is recommended.With CFR, the named port of destination is domestic tothe buyer.The CFR term is commonly used the sale of a) bulk com-

modity cargo such as oil, grains, and ore, b) oversize and over-weight cargo that will not fit into an ocean container, and c)cargo that exceeds the weight limitations of ocean containers.

ExamplesCFR, Terminal 2, Port of Oakland, California, USACFR, ABC Terminal, Port of Tokyo, Japan















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CFRCost and Freight (. . . named port of destination)Incoterm CategoryCFR is a C term specifying that the seller is responsiblefor delivering the goods on board the ship at the port ofshipment and contracting and paying for carriage to thenamed port of destination. C terms evidence ship-ment (as opposed to arrival) contracts.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)


2. Licenses, Security, and Customs FormalitiesObtain at own risk and cost all required export licenses,documents, and authorizations and carry out exportformalities and procedures.

3. Carriage and InsuranceContract or procure acontract for the carriage of the goods from the pointof delivery to the named port of destination. No obligation to provide insurance. Provide informationto enable the buyer to obtain insurance.

4. DeliveryDeliver the goods on board the ship at theport of shipment (not destination) or procure goods al-ready so delivered within the agreed-upon time.

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered on boardthe ship at the port of shipment (not destination), withinthe agreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been deliv-ered on board the ship at the port of shipment. Pay allcosts of loading and carriage to the named port ofdestination. Pay for costs of unloading if unloading isincluded in the contract for main carriage. Pay allcosts relating to export, including customs formali-

ties, duties, and taxes, as well as costs required fortransshipment through any country up to the namedport of destination.

7. Notice to the BuyerProvide notice that enablesthe buyer to take timely possession of the goods at thenamed port of destination.

8. Delivery and Transport DocumentsProvide thebuyer with a transport document, dated within the periodagreed, that allows the buyer to claim the goods at thenamed port of destination and (unless otherwise agreed)allows the buyer to sell the goods while in transit throughthe transfer of the document or by notification to the seacarrier. If a negotiable transport document is issued, a fullset of originals must be given to the buyer.


10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, required by thebuyer for import and transport of the goods from thenamed port to the final destination. Reimburse the buyerfor buyers costs related to securing information and docu-mentation, including security information the seller re-quires for export formalities, transport, security clearance,and transshipment to the named port of destination.


contract.

2. Licenses, Security, and Customs FormalitiesObtain any import licenses or authorizations and han-dle all import customs formalities.

3. Carriage and InsuranceBuyer has no obligationto the seller.

4. Taking DeliveryTake delivery of the goods at thenamed port of destination as provided in the contract.

5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered on boardthe ship at the port of shipment (not destination).

6. CostsPay any additional costs for the goods, other thanmain carriage, once they have been delivered on board theship at the port of shipment. Pay costs of unloading, light-erage, and wharfage at the port of destination unless suchcosts were to be paid by seller under sellers contract forcarriage. Pay all costs relating to import formalities, duties,fees, and taxes. Pay costs of onward carriage.

7. Notice to SellerIf, according to the sales contract,the buyer is entitled to specify a time for shipping orthe point of receiving the shipment at the named portof destination, to give seller sufficient notice.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed port of destination.

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CIFCost, Insurance, and Freight (. . . named port of destination)

CIF, Cost, Insurance, and Freight (. . . named port of destination)In Cost, Insurance, and Freight, the seller/exporter/manufac-turer clears the goods for export and delivers them on boardthe ship at the port of shipment (not destination). This iswhere risk passes from seller to buyer.The seller, however, is responsible for contracting for andpaying the costs associated with transport of the goods andminimum cover insurance to the named port of destina-tion. This is where costs transfer from seller to buyer.It is important to note that the transfer of risk from seller tobuyer occurs at a different point than the transfer of costs.When using the CIF term, it is advisable to clearly specifyin the contract of sale and in contracts of carriage, not onlythe named port of destination, but also the precise point ator within the named port of destination.

With CIF, the seller has the option to deliver the goods onboard the vessel, or to procure goods already so deliv-ered. This is a reference to so-called string saleswhere a single shipment might be resold multiple timesduring transport, as is common in the commodity trade.The named destination in CIF is a port, and therefore theterm is used only for ocean or inland waterway transport.If the shipment is containerized or to be containerized,common practice is to deliver the shipment to the carrierat a terminal and not on board a ship. In such situations,the CIP term is recommended.With CIF, the named port of destination is domestic tothe buyer.The CIF term is commonly used in the sale of a) bulk com-

modity cargo such as oil, grains, and ore, b) oversize and over-weight cargo that will not fit into an ocean container, and c)cargo that exceeds the weight limitations of ocean containers.

ExamplesCIF, Terminal 2, Port of Oakland, California, USACIF, ABC Terminal, Port of Tokyo, Japan















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CIFCost, Insurance and Freight (. . . named port of destination) Incoterm CategoryCIF is a C term specifying that the seller is responsiblefor delivering the goods on board the ship at the port ofshipment, and contracting and paying for carriage and in-surance to the named port of destination. C terms evi-dence shipment (as opposed to arrival) contracts.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)


2. Licenses, Security, and Customs FormalitiesObtain at own risk and cost all export licenses, docu-ments, and authorizations and carry out export formali-ties and procedures.

3. Carriage and InsuranceContract or procure acontract for the carriage of the goods from the pointof delivery to the named port of destination. Obtainand pay for minimum cover cargo insurance (InstituteCargo Clauses, Clause C coverage) from a reputable in-surance company or underwriter. Insurance must providecoverage at least to the named port of destination, entitlethe buyer to make a claim directly to the insurer, be for aminimum of 110% of the contract amount, and be in thecurrency of the sales contract. Provide the buyer with aninsurance policy or evidence of insurance. Provide infor-mation to enable the buyer to obtain additional insurance.

4. DeliveryDeliver the goods on board the ship at theport of shipment or procure goods already so delivered.

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered on boardthe ship at the port of shipment (not destination), withinthe agreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been delivered

on board the ship at the port of shipment. Pay all costs ofloading and carriage to the named port of destination. Payfor the cost of insurance as described in #3 above. Pay forcosts of unloading if unloading is included in the contractfor main carriage. Pay all costs relating to export, includ-ing customs formalities, duties, and taxes, as well as costsrequired for transshipment through any country up to thenamed port of destination.

7. Notice to the BuyerProvide notice that enablesthe buyer to take timely possession of the goods at thenamed port of destination.

8. Delivery and Transport DocumentsProvide thebuyer with a transport document, dated within the periodagreed, that allows the buyer to claim the goods at thenamed port of destination and (unless otherwise agreed)allows the buyer to sell the goods while in transit throughthe transfer of the document or by notification to the seacarrier. If a negotiable transport document is issued, a fullset of originals must be given to the buyer.


10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, required by thebuyer for import and transport of the goods from thenamed port to the final destination. Reimburse the buyerfor buyers costs related to securing information and docu-mentation, including security information the seller re-quires for export formalities, transport, security clearance,and transshipment to the named port of destination.

Buyers Responsibilities (summary)1. PaymentPay for the goods as per sales contract.2. Licenses, Security, and Customs Formalities


3. Carriage and InsuranceBuyer has no obligationto seller.

4. Taking DeliveryTake delivery of the goods at thenamed port of destination as provided in the contract.

5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered on boardthe ship at the port of shipment (not destination).

6. CostsPay any additional costs for the goods, other thanmain carriage, once they have been delivered on board theship at the port of shipment. Pay costs of unloading, light-erage, and wharfage at the port of destination unless suchcosts were to be paid by seller under sellers contract forcarriage. Pay all costs relating to import formalities, duties,fees, and taxes. Pay costs of onward carriage.

7. Notice to SellerIf, according to the sales contract,the buyer is entitled to specify a time for shipping orthe point of receiving the shipment at the named portof destination, to give seller sufficient notice.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed port of destination.

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CPTCarriage Paid To (. . . named place of destination)

CPT, Carriage Paid To (. . . named place of destination)In Carriage Paid To, the seller/exporter/manufacturerclears the goods for export and is responsible for deliver-ing the goods to the carrier at an agreed-upon place ofshipment (not the destination). This is where risk passesfrom seller to buyer.The seller, however, is responsible for contracting for andpaying the costs associated with transport of the goods to thenamed place of destination. This is where costs transferfrom seller to buyer.It is important to note that the transfer of risk from seller tobuyer occurs at a different point than the transfer of costs.When using the CPT term, it is advisable to clearly spec-ify in the contract of sale and in contracts of carriage, notonly the named place of destination, but also the precise

point at or within the named place of destination.The CPT term may be used for any mode of transport in-cluding multimodal.In CPT, the named place of destination is domestic to thebuyer.The CPT term is often used in sales where the shipmentis by air freight, containerized ocean freight, courier ship-ments of small parcels, and in ro-ro (roll-on, roll-off)shipments of motor vehicles.If more than one carrier is used for carriage to the namedplace of destination, such as in multimodal shipments, therisk passes when the goods have been delivered to the firstcarrier.

ExamplesCPT, ABC Rail Terminal, Madrid, SpainCPT, XYZ Barge Terminal, Frankfurt AM, Germany















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CPTCarriage Paid To (. . . named place of destination) Incoterm CategoryCarriage Paid To is a C term specifying that the seller isresponsible for contracting and paying for carriage to thenamed place of destination.C terms evidence shipment (as opposed to arrival)contracts.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)


2. Licenses, Security, and Customs FormalitiesObtain at own risk and cost all required export licenses,documents, and authorizations and carry out export for-malities and procedures as well as those required fortransshipment through any country prior to delivery.

3. Carriage and InsuranceContract or procure acontract for the carriage of the goods from the pointof delivery to the named place of destination. No obligation to provide insurance. Provide informationto enable the buyer to obtain insurance.

4. DeliveryDeliver the goods to the (first) carrier at thenamed place of shipment (not place of destination).

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered to the(first) carrier at the place of shipment, within theagreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been deliveredto the (first) carrier at the named place of shipment. Pay allcosts of loading and carriage to the named place of desti-nation. Pay costs of unloading if unloading is included inthe contract for main carriage. Pay all costs relating to ex-port, including customs formalities, duties, and taxes, as

well as costs required for transshipment through anycountry up to the named place of destination.

7. Notice to the BuyerProvide timely notice that thegoods have been delivered to the (first) carrier andnotice that enables the buyer to take timely posses-sion of the goods at the named place of destination.

8. Delivery and Transport DocumentsProvide thebuyer with a transport document, dated within the periodagreed, that allows the buyer to claim the goods at thenamed place of destination and (unless otherwise agreed)allows the buyer to sell the goods while in transit throughthe transfer of the document or by notification to the seacarrier. If a negotiable transport document is issued, a fullset of originals must be given to the buyer.


10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, required by thebuyer for import and transport of the goods from thenamed place to the final destination. Reimburse the buyerfor buyers costs related to securing information and docu-mentation, including security information the seller re-quires for export formalities, transport, security clearance,and transshipment to the named place of destination.


contract.

2. Licenses, Security, and Customs FormalitiesObtain any import licenses or authorizations and han-dle all import formalities.

3. Carriage and InsuranceThe buyer has no obli-gation to seller for carriage or insurance.

4. Taking DeliveryTake delivery of the goods at thenamed place of destination as provided in the contract.

5. Risk TransferAssume all risk of loss or damagefrom the time the goods have been delivered to the(first) carrier at the place of shipment.

6. CostsPay costs other than main carriage after thegoods have been delivered to the (first) carrier at theplace of shipment. Such costs include unloading, lighter-age, and wharfage at the place of destination unless suchcosts were to be paid by seller under sellers contract forcarriage. Pay all costs relating to import formalities, du-ties, fees, and taxes. Pay costs of onward carriage.

7. Notice to SellerIf, according to the sales contract,the buyer is entitled to specify a time or point of tak-ing delivery at the named place of destination, to giveseller sufficient notice.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. Timely provide the seller, at the sellers request and cost,with any documents and information required for ex-port, transport, and security clearance of the goods to thenamed place of destination.

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SELLER BUYERCIPCarriage and Insurance Paid To (. . . named place of destination)

CIP, Carriage and Insurance Paid To (. . . named place of destination)In Carriage and Insurance Paid To, the seller/exporter/manufacturer clears the goods for export and is responsiblefor delivering the goods to the carrier at an agreed-uponplace of shipment (not the destination). This is where riskpasses from seller to buyer.The seller, however, is responsible for contracting for andpaying the costs associated with transport of the goods andminimum cover insurance to the named place of destina-tion. This is where costs transfer from seller to buyer.It is important to note that the transfer of risk from seller tobuyer occurs at a different point than the transfer of costs.When using the CIP term, it is advisable to clearly spec-ify in the contract of sale and in contracts of carriage, notonly the named place of destination, but also the precise

point at or within the named place of destination.The CIP term may be used for any mode of transport in-cluding multimodal.In CIP, the named place of destination is domestic to thebuyer.The CIP term is often used in sales where the shipment isby air freight, containerized ocean freight, courier ship-ments of small parcels, and in ro-ro (roll-on, roll-off)shipments of motor vehicles.If more than one carrier is used for carriage to the namedplace of destination, such as in multimodal shipments, therisk passes when the goods have been delivered to the firstcarrier.

ExamplesCIP, ABC Rail Terminal, Siding C, Madrid, SpainCIP, XYZ Barge Terminal, Dock A, Frankfurt AM, Germany















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CIPCarriage and Insurance Paid To (. . . named place of destination) Incoterm CategoryCarriage and Insurance Paid To is a C term specifyingthat the seller is responsible for contracting and paying forcarriage and insurance to the named place of destination.C terms evidence shipment (as opposed to arrival)contracts.Note: Documents may be paper or electronic, as custom-ary or as agreed to by the parties to the transaction.Modes of Transport CoveredAll modes of transport including multimodal.Sellers Responsibilities (summary)


2. Licenses, Security, and Customs FormalitiesObtain at own risk and cost all required export licenses,documents, and authorizations and carry out export for-malities and procedures as well as those required fortransshipment through any country prior to delivery.

3. Carriage and InsuranceContract or procure acontract for the carriage of the goods from the pointof delivery to the named place of destination. Obtainand pay for minimum cover cargo insurance (InstituteCargo Clauses, Clause C coverage) from a reputable in-surance company or underwriter. Insurance must providecoverage at least to the named place of destination, entitlethe buyer to make a claim directly to the insurer, be for aminimum of 110% of the contract amount, and be in thecurrency of the sales contract. Provide the buyer with aninsurance policy or evidence of insurance. Provide infor-mation to enable the buyer to obtain additional insurance.

4. DeliveryDeliver the goods to the (first) carrier at thenamed place of shipment (not place of destination).

5. Risk TransferAssume all risks of loss or damageto the goods until they have been delivered to the(first) carrier at the place of shipment, within theagreed-upon time stipulated in the sales contract.

6. CostsPay all costs until the goods have been delivered

to the (first) carrier at the named place of shipment. Pay allcosts of loading and carriage to the named place of desti-nation. Pay for insurance as described in #3 above. Paycosts of unloading if unloading is included in the contractfor main carriage. Pay all costs relating to export, includ-ing customs formalities, duties, taxes, as well as costs re-quired for transshipment through any country up to thenamed place of destination.

7. Notice to the BuyerProvide timely notice that thegoods have been delivered to the (first) carrier andnotice that enables the buyer to take timely posses-sion of the goods at the named place of destination.

8. Delivery and Transport DocumentsProvide thebuyer with a transport document, dated within the periodagreed, that allows the buyer to claim the goods at thenamed place of destination and (unless otherwise agreed)allows the buyer to sell the goods while in transit throughthe transfer of the document or by notification to the seacarrier. If a negotiable transport document is issued, a fullset of originals must be given to the buyer.


10. OtherTimely provide the buyer, at the buyers requestand cost, assistance in securing information and docu-ments, including security information, required by thebuyer for import and transport of the goods from thenamed place to the final destination. Reimburse the buyerfor buyers costs related to securing information and docu-mentation, including security information the seller re-quires for export formalities, transport, security clearance,and transshipment to the named place of destination.



Obtain any import licenses or authorizations and han-dle all import formalities.

3. Carriage and InsuranceNo obligation to seller.4. Taking DeliveryTake delivery of the goods at the

named place of destination as provided in the contract.5. Risk TransferAssume all risk of loss or damage

from the time the goods have been delivered to the(first) carrier at the place of shipment.

6. CostsPay any additional costs for the goods, otherthan main carriage, once they have been delivered to the(first) carrier at the place of shipment. Such costs includeunloading, lighterage, and wharfage at the place of desti-nation unless such costs were to be paid by seller undersellers contract for carriage. Pay all costs relating to im-port formalities, duties, fees, and taxes. Pay costs of on-ward carriage.

7. Notice to SellerIf, according to the sales contract,the buyer is entitled to specify a time or point of tak-ing delivery at the named place of destination, to giveseller sufficient notice.



10. OtherTimely advise the seller of any security-relateddata requirements. Reimburse the seller for sellers costsrelated to securing information or documentation, in-cluding security information, that the buyer requires forimport formalities, security clearance, and transport ofthe goods to the final destination. At the sellers request and cost, provide the seller withany documents and information required for export,transport, and security clearance of the goods to thenamed place of destination.

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DATDelivered At Terminal (. . . named terminal at port or place of destination)

DAT, Delivered At Terminal (. . . named terminal at port or place of destination)In Delivered At Terminal, the seller/exporter/manufac-turer clears the goods for export and is responsible fortheir delivery to the named terminal at port or place ofdestination.In DAT, the seller makes the goods available to the buyerunloaded from the arriving means of transport.The terminal can be of any sort: a sea, road, air, or rail ter-minal; a warehouse, a quay, or container yard; and cov-ered or uncovered.When using the DAT term, it is advisable to clearly specifyin the contract of sale and in contracts of carriage, not onlythe terminal by name, but also the precise point at or withinthe terminal at the named port or place of destination.In DAT, the named terminal at port or place of destina-

tion is domestic to the buyer.The DAT term may be used for any mode of transport in-cluding multimodal.All forms of payment are used in DAT transactions.The DAT term is ideal for multimodal transport.DAT is the only term under which the seller is responsi-ble for unloading.

ExamplesDAT, Terminal XYZ, Charles de Gaulle Airport, Paris,FranceDAT, Sea Terminal ABC, Port of New York, USA















CARRIAGE

RISKS

COSTS

SELLER BUYER

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DATDelivered At Terminal (. . . named terminal at port or place of destination) Incoterm CategoryDelivered At Te