Incoterms 2010

What are Incoterms?

Incoterms are a set of international rules for the interpretation of the most commonly used trade terms.

These denote the points at which shipper, carrier and consigneee risk and responsibility start and end.This set of international rules was first published in 1936 known as "INCOTERMS 1936" by the International Chamber of Commerce.

Incoterms are amended every 10 years. Incoterms are recognised globally by courts and other authorities. Frequently, parties to a contract are unaware of the different trading practices in their respective countries. This lack of knowledge can lead to misunderstandings and disputes between customer and supplier.

The incorporation of Incoterms in international sales contracts reduces this risk.

Incoterms 2010 - How do they affect you?

A new set of Incoterms have applied since 1st January 2011 which are highlighted below

EXW	Ex Works	Goods are placed at the disposal of the buyer at the seller's premises or at another named place (warehouse, factory, etc.). The seller has no obligation to load the goods on any collecting vehicle.
FCA	Free Carrier	The seller delivers the goods to the carrier or another person nominated by the buyer at the seller's premises or another named place.
FAS	Free Alongside Ship	The seller delivers the goods alongside the vessel nominated by the buyer at the named port of shipment.
FOB	Free On Board	All costs up to delivery over the ships rail at the named port of shipment. Sea or inland waterway transport only.
CIF	Cost, Insurance and Freight	Cost of goods plus insurance and freight, duty unpaid, to a named port of destination. Sea or inland waterway transport only.
CFR	Cost and Freight	As for CIF except that the cost of insurance is covered by the buyer.
CIP	Carriage and Insurance Paid To	Costs of carriage and insurance of the goods, duty unpaid to the named destination. Applies to all modes of transport.
CPT	Carriage Paid To	As for CIP, except the cost of insurance is carried by the buyer.
DAT	Delivered At Terminal	Delivery takes place when the goods are placed at the disposal of the buyer once unloaded from the arriving means of transport at a named terminal at the named port of place of destination. The seller bears all the risks of loss or damage to the goods until they have been delivered in accordance with the agreed delivery place. Applies to all modes of transport.
DAP	Delivered At Place	Delivery takes place when the goods are placed at the disposal of the buyer on the arriving means of transport at a named place of destination. The seller bears all the risks of loss or damage to the goods until they have been delivered in accordance with the agreed delivery place. Applies to all modes of transport.
DDP	Delivered Duty Paid	Delivery takes place when the goods are placed at the disposal of the buyer, cleared for import, on the arriving means of transport at a named place of destination. The seller bears all the risks of loss or damage to the goods until they have been delivered in accordance with the agreed delivery place. Applies to all modes of transport.