The eighth published set of pre-defined terms,
Incoterms 2010
defines 11 rules, reducing the 13 used in Incoterms 2000 by introducing
two new rules ("Delivered at Terminal", DAT; "Delivered at Place", DAP)
that replace four rules of the prior version ("Delivered at Frontier",
DAF; "Delivered Ex Ship", DES; "Delivered Ex Quay", DEQ; "Delivered Duty
Unpaid", DDU).
In the prior version, the rules were divided into four categories, but the 11 pre-defined terms of
Incoterms 2010 are subdivided into two categories
based only on method of delivery.
The larger group of seven rules applies regardless of the method of
transport, with the smaller group of four being applicable only to sales
that solely involve transportation over water.
Any mode of transport
The 7 rules defined by
Incoterms 2010 for any mode(s) of transportation are:
EXW – Ex Works (named place of delivery)
The seller makes the goods available at his/her premises. The buyer
is responsible for uploading. This term places the maximum obligation on
the buyer and minimum obligations on the seller. The Ex Works term is
often used when making an initial quotation for the sale of goods
without any costs included. EXW means that a seller has the goods ready
for collection at his premises (works, factory, warehouse, plant) on the
date agreed upon. The buyer pays all transportation costs and also
bears the risks for bringing the goods to their final destination. The
seller does not load the goods on collecting vehicles and doesn't clear
them for export. If the seller does load the goods, he does so at
buyer's risk and cost. If parties wish seller to be responsible for the
loading of the goods on departure and to bear the risk and all costs of
such loading, this must be made clear by adding explicit wording to this
effect in the contract of sale..
FCA – Free Carrier (named place of delivery)
The seller delivers goods, cleared for export, to the
buyer-designated carrier at a named and defined location. This is used
for any mode of transport. The seller must load goods onto the buyer's
carrier. The key document signifying transfer of responsibility is
receipt by carrier to exporter.
CPT – Carriage Paid To (named place of destination)
The seller pays for carriage. Risk transfers to buyer upon handling
goods over to the first carrier at place of shipment in the country of
export.
This term is used for all kind of shipments.
CIP – Carriage and Insurance Paid to (named place of destination)
The containerized transport/multimodal equivalent of CIF. Seller pays
for carriage and insurance to the named destination point, but risk
passes when the goods are handed over to the first carrier.
DAT – Delivered at Terminal (named terminal at port or place of destination)
Seller pays for carriage to the terminal, except for costs related to
import clearance, and assumes all risks up to the point that the goods
are unloaded at the terminal.
DAP – Delivered at Place (named place of destination)
Seller pays for carriage to the named place, except for costs related
to import clearance, and assumes all risks prior to the point that the
goods are ready for unloading by the buyer.
DDP – Delivered Duty Paid (named place of destination)
Seller is responsible for delivering the goods to the named place in
the country of the buyer, and pays all costs in bringing the goods to
the destination including import duties and taxes. The seller is not
responsible for unloading. This term is often used in place of the
non-Incoterm "Free In Store (FIS)". This term places the maximum
obligations on the seller and minimum obligations on the buyer.
Sea and inland waterway transport
The four rules defined by Incoterms 2010 for international trade where transportation is entirely conducted by water are:
FAS – Free Alongside Ship (named port of shipment)
The seller must place the goods alongside the ship at the named port.
The seller must clear the goods for export. Suitable only for maritime
transport but
NOT for multimodal sea transport in
containers (see
Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo.
FOB – Free on Board (named port of shipment)
The seller must load the goods on board of the vessel by the buyer.
Cost and risk are divided when the goods are actually on board of the
vessel. The seller must clear the goods for export. The term is
applicable for maritime and inland waterway transport only but
NOT for multimodal sea transport in containers (see
Incoterms 2010,
ICC publication 715). The buyer must instruct the seller the details of
the vessel and the port where the goods are to be loaded, and there is
no reference to, or provision for, the use of a carrier or forwarder.
This term has been greatly misused over the last three decades ever
since
Incoterms 1980 explained that FCA should be used for container shipments.
It means the seller pays for transportation of goods to the port of
shipment, loading cost. The buyer pays cost of marine freight
transportation, insurance, uploading and transportation cost from the
arrival port to destination. The passing of risk occurs when the goods
pass the ship's rail at port of shipments.
CFR – Cost and Freight (named port of destination)
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. This term is formerly known as CNF (C&F, or C+F). Maritime transport only.
CIF – Cost, Insurance and Freight (named port of destination)
Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only.
Allocations of costs buyer/seller according to Incoterms 2010
| Incoterm 2010 |
Export-Customs declaration |
Carriage to port of export |
Unloading of truck in port of export |
Loading charges in port of export |
Carriage (Sea Freight/Air Freight) to port of import |
Unloading charges in port of import |
Insurance |
Loading on truck in port of import |
Carriage to place of destination |
Import customs clearance |
Import taxes |
| EXW |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
| FCA |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
No |
No |
|
| FAS |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
| FOB |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
| CPT |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
| CFR |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
CIF
(By Sea only)
|
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
| CIP |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
| DAT |
Seller |
Seller |
{{ |
Buyer |
| DAP |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
| DDP |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Previous terms from Incoterms 2000 eliminated from Incoterms 2010
DAF – Delivered at Frontier (named place of delivery)
This term can be used when the goods are transported by rail and
road. The seller pays for transportation to the named place of delivery
at the frontier. The buyer arranges for customs clearance and pays for
transportation from the frontier to his factory. The passing of risk
occurs at the frontier.
DES – Delivered Ex Ship (named port of delivery)
Where goods are delivered ex ship, the passing of risk does not occur
until the ship has arrived at the named port of destination and the
goods made available for unloading to the buyer. The seller pays the
same freight and insurance costs as he would under a CIF arrangement.
Unlike CFR and CIF terms, the seller has agreed to bear not just cost,
but also Risk and Title up to the arrival of the vessel at the named
port. Costs for unloading the goods and any duties, taxes, etc. are for
the Buyer. A commonly used term in shipping bulk commodities, such as
coal, grain, dry chemicals; and where the seller either owns or has
chartered, their own vessel.
DEQ – Delivered Ex Quay (named port of delivery)
This is similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of discharge.
DDU – Delivered Duty Unpaid (named place of destination)
This term means that the seller delivers the goods to the buyer to
the named place of destination in the contract of sale. A transaction in
international trade where the seller is responsible for making a safe
delivery of goods to a named destination, paying all transportation
expenses but not the duty. The seller bears the risks and costs
associated with supplying the goods to the delivery location, where the
buyer becomes responsible for paying the duty and other customs clearing
expenses.
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