shipping education inco terms

8/8/2019 Shipping Education INCO TERMS

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FOREIGN TRADE AGENCY SERVICES

METHODS OF DELIVERY IN INTERNATIONAL TRADE

"INCO TERMS 2000"

CIF

Cost, Insurance and

Freight

(... named port of

destination)

means that the seller delivers when the goods pass the ship's rail in the port of shipment. Theseller must pay the costs and freight necessary to bring the goods to the named port of

destination .The CIF term requires the seller to clear the goods for export. This term can be

used only for sea and inland waterway transport. If the parties do not intend to deliver the

goods across the ship's rail, the CIP term should be used.

FOB

Free On Board

(... named port ofshipment)

means that the seller delivers when the goods pass the ship's rail at the named port of

shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the

goods from that point. The FOB term requires the seller to clear the goods for export. Thisterm can be used only for sea or inland waterway transport.If the parties do not intend to

deliver the goods across the ship's rail, the FCA term should be used.

NB : The implications and the interpretations of Inco terms which have been revised/ puplished in different years may differ from one another.

Therefore the year of the revised puplication of the Inco terms has to be stated along with the Inco term used in the offers/ quotations in order

to clarify the seller's and buyer's responsibilities and for this reason the reader is recommended to read carefully the seller's and buyer's

responsibilities of each term before using it and then state the revised publication year of the inco term along with the term in their

offer/quotations, e.g. Delivery Term : FOB Istanbul Inco Terms 2000.

Or

Free on board (FOB): the goods are placed on board the vessel by the seller at the port of shipment specifiedin the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship's rail.

Cost, Insurance and Freight (CIF): the exporter pays the cost of goods, cargo and insurance plus alltransportation charges to the named port of destination.

Also seewww.i-b-t.net/incoterms.html
http://www.i-b-t.net/incoterms.htmlhttp://www.i-b-t.net/incoterms.htmlhttp://www.i-b-t.net/incoterms.htmlhttp://www.i-b-t.net/incoterms.html


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The 13 INCOTERMS

Origin Terms

EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.The seller will not contract for any transportation.

International Carriage NOT Paid by Seller

FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not

loaded.This term can be used for any mode of transport.

FAS - Free Alongside Ship, named ocean port of shipment.

Ocean shipments that are NOT containerized.

FOB - Free On Board vessel, named ocean port of shipment.This term is used for ocean shipments only where it is important that the goods pass the ship's rail.

International Carriage Paid by the Seller

CFR- Cost and Freight, Named ocean port of destination.This term is used for ocean shipments that are not containerized.

CIF - Cost, Insurance and Freight, named ocean port of destination.This term is used for ocean shipments that are not containerized.

CPT - Carriage Paid To, named place or port of destination.This term is used for air or ocean containerized and roll-on roll-off shipments.

CIP - Carriage and Insurance Paid To, named place or port of destination.

This term is used for air or ocean containerized and roll-on roll-off shipments.

Arrival At Stated Destination

DAF - Delivered At Frontier, named place of destination, by land, not unloaded.This term is used for any mode of transportation but must be delivered by land.

DES - Delivered Ex-Ship, named port of destination, not unloaded.This term is used for ocean shipments only.


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DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.This term is used for ocean shipments only.

DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.This term is used for any mode of transportation.

DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.This term is used for any mode of transportation.

"INCOTERMS 2000" is one in a series of short articles published by International Business Training, a division of InterMart, Inc. Thesearticles are designed to help businesses and individuals succeed in the global marketplace.

For more information about a variety of import and export publications, self-study courses and seminars designed specifically for smalland mid-sized companies, visit our web page atwww.i-b-t.net.

The laws, regulations, procedures, requirements, methods, interpretations and other information contained in this article are subject to

change and therefore the reader should not rely solely on this guide in dealing with the commercial laws of the United States or foreigncountries. Errors and omissions, typographical, clerical and otherwise, sometimes occur and it is possible that errors have occurred inrespect to anything printed in this article.

(c) 2000 International Business Institute, Inc.Used with permission by InterMart, Inc., PO Box 22267, Eagan, MN 55122-0267
http://www.i-b-t.net/http://www.i-b-t.net/http://www.i-b-t.net/http://www.i-b-t.net/


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INCOTERMS 2000 - Chart of Responsibility

When negotiating an international sales contract, both parties need to pay as much attention to the terms of sale as to the sales price.

To make it as clear as possible, an international set of trade terms (INCOTERMS) has been adopted by most countries that definesexactly the responsibilities and risks of both the buyer and seller including while the merchandise is in transit. //////The following chartsummarizes the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS. In addition, a definition for each

term is included at the bottom of the page. For a more complete description of each of the INCOTERMS,The IBT Guide to

INCOTERMS 2000book published by International Business Training fully and clearly defines each of the new INCOTERMS that becameeffective January 1, 2000, and includes a number of case studies that demonstrate the use of the different terms in real-life situations.

EXW FCA FAS FOB CFR CIF CPT CIP DAF DES DEQ DDU

DDP

SERVICES Ex Works FreeCarrier

FreeAlongside

Ship

FreeOnboardVessel

Cost &Freight

CostInsurance& Freight

CarriagePaid To

CarriageInsurance

Paid To

DeliveredAt Frontier

DeliveredEx Ship

DeliveredEx Quay

DutyUnpaid

DeliveredDuty

Unpaid

DeliveredDutyPaid

WarehouseStorage

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

WarehouseLabor


ExportPacking


LoadingCharges

Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

InlandFreight

BuyerBuyer/Seller*

Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

TerminalCharges

Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Forwarder'sFees

Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller

Loading OnVessel

Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Ocean/AirFreight Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller

ChargesOn ArrivalAtDestination

Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Buyer Buyer Seller Seller Seller

Duty, Taxes& CustomsClearance

Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller

Delivery ToDestination

Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller

* There are actually two FCA terms: FCA Seller's Premises where the seller is responsible onlyfor loading the goods and notresponsible

for inland freight; and FCA Named Place (International Carrier) where the seller is responsible for inland freight.
http://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspxhttp://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspxhttp://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspxhttp://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspxhttp://www.i-b-t.net/incoterms.html#EXW#EXWhttp://www.i-b-t.net/incoterms.html#EXW#EXWhttp://www.i-b-t.net/incoterms.html#FCA#FCAhttp://www.i-b-t.net/incoterms.html#FCA#FCAhttp://www.i-b-t.net/incoterms.html#FAS#FAShttp://www.i-b-t.net/incoterms.html#FAS#FAShttp://www.i-b-t.net/incoterms.html#FOB#FOBhttp://www.i-b-t.net/incoterms.html#FOB#FOBhttp://www.i-b-t.net/incoterms.html#CFR#CFRhttp://www.i-b-t.net/incoterms.html#CFR#CFRhttp://www.i-b-t.net/incoterms.html#CIF#CIFhttp://www.i-b-t.net/incoterms.html#CIF#CIFhttp://www.i-b-t.net/incoterms.html#CPT#CPThttp://www.i-b-t.net/incoterms.html#CPT#CPThttp://www.i-b-t.net/incoterms.html#CIP#CIPhttp://www.i-b-t.net/incoterms.html#CIP#CIPhttp://www.i-b-t.net/incoterms.html#DAF#DAFhttp://www.i-b-t.net/incoterms.html#DAF#DAFhttp://www.i-b-t.net/incoterms.html#DES#DEShttp://www.i-b-t.net/incoterms.html#DES#DEShttp://www.i-b-t.net/incoterms.html#DEQ#DEQhttp://www.i-b-t.net/incoterms.html#DEQ#DEQhttp://www.i-b-t.net/incoterms.html#DDU#DDUhttp://www.i-b-t.net/incoterms.html#DDU#DDUhttp://www.i-b-t.net/incoterms.html#DDP#DDPhttp://www.i-b-t.net/incoterms.html#DDP#DDPhttp://www.i-b-t.net/incoterms.html#DDP#DDPhttp://www.i-b-t.net/incoterms.html#DDU#DDUhttp://www.i-b-t.net/incoterms.html#DEQ#DEQhttp://www.i-b-t.net/incoterms.html#DES#DEShttp://www.i-b-t.net/incoterms.html#DAF#DAFhttp://www.i-b-t.net/incoterms.html#CIP#CIPhttp://www.i-b-t.net/incoterms.html#CPT#CPThttp://www.i-b-t.net/incoterms.html#CIF#CIFhttp://www.i-b-t.net/incoterms.html#CFR#CFRhttp://www.i-b-t.net/incoterms.html#FOB#FOBhttp://www.i-b-t.net/incoterms.html#FAS#FAShttp://www.i-b-t.net/incoterms.html#FCA#FCAhttp://www.i-b-t.net/incoterms.html#EXW#EXWhttp://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspxhttp://www.i-b-t.net/shop/pc-26-2-the-ibt-guide-to-incoterms-2000-reference-book.aspx

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