The 11 Incoterms

Incoterms for any mode or modes of transport

EXW (Ex Works): the seller delivers on its own premises (factory or warehouse) the goods to the buyer, without making the load on the vehicle (truck) that comes to pick them up or make export clearance. All costs and export risks are borne by the buyer.

FCA (Free Carrier): the seller delivers the goods at the agreed place to the carrier nominated by the buyer. The place of delivery determines the obligations of loading and unloading in the first transport: if delivery is made on the premises of the seller he is liable for the load; if delivery occurs elsewhere (usually a facility or transport infrastructure), the buyer is responsible for the unload. The export customs clearance is done by the seller.

CPT (Carriage Paid To): the seller contracts and pays for transportation to the place of delivery at the buyer's country. Transportation risk passes from the seller to the buyer when the goods are delivered to the first carrier in the chain. The export customs clearance is done by the seller.

CIP (Carriage and Insurance Paid to): This Incoterm means the same obligations to the seller that the Incoterm CPT and also the seller has to procure transport insurance, though, is only required to purchase insurance with minimum coverage.

DAT (Deliver At Terminal): the seller delivers the goods unloaded in the country of destination in a terminal or transport infrastructure (port, airport, etc.). Transportation risk passes from the seller to the buyer at the time of delivery to the destination country. The export customs clearance is done by the seller and the import customs clearance and the tariffs are paid by the buyer.

DAP (Delivered At Place): the seller delivers the goods ready for unloading in the country of destination, in a place other than a terminal or transport infrastructure. The transportation risk passes from seller to buyer upon delivery to the destination country. The export customs clearance is done by the seller and the import customs clearance and tariffs are paid by the buyer.

DDP (Deliverd Duty Paid): the seller delivers the goods ready for unloading at the destination country, usually at the buyer´s premises (factory or warehouse) the buyer. All costs and risks, including customs clearance of export and import, are borne by the seller.

Incoterms for sea transport

FAS (Free Alongside Ship): the seller delivers the goods, alongside the vessel at the port of shipment. From this point all costs and risks are borne by the buyer. The export customs clearance is done by the seller.

FOB (Free On Board): the seller delivers the goods on board the ship at the port of shipment. The buyer chooses the ship and pays the freight. The transportation risk passes from the seller to the buyer when the goods are delivered on board the ship. The export customs clearance is done by the seller.

CFR (Cost and Freight): the seller assumes transport costs (freight) to the port of destination, although the risk of loss or damage to the goods is transferred from seller to buyer once the goods have been placed on board of the ship at shipment port. The export customs clearance is done by the seller.

CIF (Cost, Insurance and Freight): this Incoterm means the same obligations to the seller that the Incoterm CFR and also the seller has to procure transport insurance, though, is only required to purchase insurance with minimum coverage.

Practical Guide to Incoterms 2010 Incoterms