INCOTERMS – establish international rules that allow interpreting and solving problems derived from imprecise knowledge of the commercial practices used in the countries of the buyer and seller, according to the Official Rules of the International Chamber of Commerce (ICC), for the interpretation of commercial terms. INCOTERMS 2000.
FAS (Free Alongside Ship) – The delivery of the merchandise is made when it is placed by the seller alongside the ship at the agreed port of shipment. All costs and risks of loss or damage to the merchandise from that moment are for the buyer’s account. This incoterm requires the seller to clear the merchandise through customs for export.
FOB (Free on Board) – The seller has the obligation to load the merchandise on board the ship at the port of shipment specified in the sales contract. The buyer selects the vessel and pays the ocean freight. The transfer of risks and expenses occurs when the merchandise exceeds the rail of the ship. The seller is in charge of the procedures for the export.
CIF (Cost Insurance and Freight) – The seller has the same obligations as under CFR, although, in addition, he must contract and pay the marine insurance premium to cover the loss or damage of the merchandise during transport, also taking care of, customs clearance of merchandise for export.
EXW (Ex Works) – The seller undertakes to make it available to the buyer at its establishment or agreed place (for example, factory, workshop, warehouse, etc.), without dispatching it for export or loading it in the receiving vehicle, concluding its obligations.
CFR (Cost and Freight) – The seller pays the transportation and other expenses necessary for the merchandise to arrive at the agreed port, although the risk of loss or damage to the merchandise is transferred from seller to buyer once it has been delivered to board the ship at the port of shipment and has passed the rail of the ship. It also requires the seller to clear the merchandise for export. Insurance is the responsibility of the buyer.
DAF (Delivered at Frontier) – The seller fulfills his obligation, when, once the merchandise has been cleared at customs for export, it is delivered at the agreed point and place of the border, before crossing the border customs of the neighboring country and without responsibility to download it. It is vitally important that the “term” border is precisely defined.
DES (Delivered ex Ship) – The merchandise is made available by the seller to the buyer on board the ship, at the agreed port of destination, without clearing it through customs for importation. The seller assumes the costs and risks of transporting the merchandise to the port of destination, but not of the unloading. It is only used when the transport is carried out by ocean.
DEQ (Delivered ex Quay) – The seller fulfills his delivery obligation when he makes the goods available to the buyer on the quay and once unloaded, at the agreed port of destination. In this term, the buyer is obliged to carry out the customs clearance of the merchandise for importation. It is only used in maritime transport.
FCA (Free Carrier) – The seller delivers the merchandise and dispatches it for export to the carrier named by the buyer at the agreed place. The chosen place of delivery determines the obligations of loading and unloading the goods at that place: if the delivery takes place at the seller’s premises, the latter is responsible for loading; if delivery occurs elsewhere, the seller is not responsible for the unloading.
CPT (Carriage Paid to) – The seller hires and pays the freight for transporting the merchandise to the agreed place of destination. The risk of loss or damage is transferred from the seller to the buyer when the goods have been delivered to the custody of the first carrier designated by the seller, if there are several. Export customs clearance is carried out by the seller.
CIP (Carriage and Insurance Paid to) – This term obliges the seller in the same way as the CPT and must also contract the insurance and pay the corresponding premium, to cover the loss or damage of the merchandise during transport, although it is only required to take out insurance with minimum coverage.
DDU (Delivered Duty Unpaid) – The seller delivers the goods to the buyer at the agreed place in the buyer’s country, not cleared for import customs and not unloaded from the means of transport, upon arrival at said place.
The term DDU can be used in any means of transport. The seller must assume all the expenses and risks related to taking the merchandise to the agreed place. The buyer must pay any additional costs and bear the risks in case of not being able to clear the goods through customs for importation in due time.
DDP (Delivered Duty Paid) – In this term the seller delivers the merchandise to the buyer, dispatched for importation and not unloaded from the means of transport upon arrival at the agreed place in the country of importation. The seller assumes all expenses and risks, including duties, taxes and other charges for bringing the merchandise to that place, once cleared through customs for importation.
THANK YOU FOR READ / CEO AGONISTA.