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Incoterms 2010

Incoterms 2010

You make your first import/export operations and you don't know the Incoterms. The informations below will help you understand them.

Incoterms are standards that define the rights and obligations between the seller and the buyer in the context of international trade.

In detail, these famous standards have three main functions:

- They are used to define the distribution of costs between the seller and buyer and responsibilities.

- They are used to determine when the risk is transferred between the two protagonists.

- They allow to who should provide any document during the exchange between the two parties.


There are 11 different Incoterms, some can be used for any type of delivery, others are suitable for maritime transport only.

 

Universal Incoterms:

- EXW: Ex Works, the unloaded start, before duty factory (only suitable for domestic, national flows);

- FCA: Free Carrier, charged and released goods in the country of departure, at the seller or at the buyer's forwarder;

- CPT: Carriage Paid To, delivery to the first carrier, the charge to the unloading mode of transport, without transport insurance;

- CIP: Carriage and Insurance Paid to, same as CPT, with goods transported insurance taken out by the seller on behalf of the buyer;

- DAT: Delivered At Terminal, goods (unloaded) delivered on the platform, in a marine terminal, river, air, road or rail designated (import customs clearance and haulage paid by the buyer);

- DAP: Delivered At Place, goods (not unloaded) made available to the buyer in the importing country to a place specified in the contract (unloading, customs clearance import paid by the buyer);

- DDP: Delivered Duty Paid, goods (not unloaded) delivered to final destination, customs clearance and import taxes payable by the seller; the buyer only supports unloading (if excluding VAT type taxes, clearly stated).


Incoterms for sea / river transport:

- FAS: Free Alongside Ship, on the dock of the port of departure;

- FOB: Free On Board, loaded on the ship, the loading costs in the latter being a function of the term indicated by the liner shipping company (charged to the seller);

- CFR: Cost and Freight loaded into the boat delivery from port charges paid to port of destination, without insurance for transport, not unloaded from the ship to destination (unloading costs are included or not depending the term liner at the port);

- CIF: Cost, Insurance and Freight loaded on the boat, costs to the arrival port, secure transported goods purchased by the seller on behalf of the buyer.


INCOTERMS 2010

To help your understanding of the steps Import / Export, you will find below a summary table of the various Incoterms in transportation of goods.

 

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