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Incoterms define the responsibilities of buyer and seller for delivery of goods under sales contracts. Incoterms 2000 is the authoritative text for determining how costs and risks are allocated to the parties. These terms are regularly incorporated into sales contracts worldwide and have become part of the daily language of trade.
EXW(named place): the seller makes the goods available at his premises
FCA. Free Carrier (named place): the seller hands over the goods, cleared for export, into the custody of the first carrier (named by the buyer) at the named place. <br> This term is suitable for all modes of transport, including carriage by air, rail, road, and containerised / multi-modal transport.
FAS. Free Alongside Ship (named loading port): free Alongside Ship: the seller must place the goods alongside the ship at the named port. The seller must clear the goods for export; this changed in the 2000 version of the Incoterms. Suitable for maritime transport only.
FOB. Free On Board (named loading port): the classic maritime trade term, Free On Board: seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. Maritime transport only.
CFR. Cost and Freight(named destination port): 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 have crossed the ship's rail. Maritime transport only.
CIF. Cost, Insurance and Freight (named destination port): exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only.
CPT. Carriage Paid To (named destination port): the general/containerised/multimodal equivalent of CFR. The seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier.
CIP. Carriage and Insurance Paid to (named destination port): the containerised 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.
DAF Delivered At Frontier is an Incoterm. It 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.
Delivered Ex Ship (DES) is an Incoterm. 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.
Delivered Ex Quay (DEQ) is an Incoterm. It means the same as DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination.
Delivered Duty Unpaid (DDU) is an Incoterm. It means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. The goods are not cleared for import or unloaded from any form of transport at the place of destination. The buyer is responsible for the costs and risks for the unloading, duty and any subsequent delivery beyond the place of destination.
Delivered Duty Paid (DDP) is an Incoterm. It means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty.
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