The Incoterms rules (or International Commercial Terms) are a set of contract terms valid worldwide which clearly and unambiguously define which party bears the costs and responsibilities for each part of a shipment, for the customs costs on departure and arrival, and for the insurance costs related to imports and exports. Below you will find the specifics of each rule.
Costs to be borne by the seller according to the various rules.
|Old term||Goods loading||Export customs||Transportation to port||Unloading at port||Loading onto boat||Sea freight||Unloading from boat||Loading at port||Transportation from port||Insurance||Import customs||Import taxes|
EXW - Ex Works (named place of delivery)
The seller delivers the goods to the place specified by the buyer, and the buyer bears all the costs of transport, insurance and customs clearance, also assuming the related risks.
FCA - Free Carrier (named place of delivery)
The seller delivers the goods, cleared for export, to the carrier/forwarding agent appointed by the buyer. From this moment on, all costs and risks are borne by the buyer.
FAS - Free Alongside Ship (named port of shipment)
The seller delivers the goods, already cleared for export, to the dock or warehouse at the agreed port of shipment. Subsequently, all costs and risks are borne by the buyer.
FOB - Free on Board (named port of shipment)
The seller bears all costs from their establishment to the port of shipment. The buyer, on the other hand, assumes the risks involved in transporting the goods from the port of shipment to the port of destination.
CFR - Cost and Freight (named port of destination)
All transport costs up to the port of destination are borne by the seller. The buyer is responsible for insurance expenses, costs for transporting the goods from the port of destination to their establishment and customs costs in the destination country.
CIF - Cost, Insurance and Freight (named port of destination)
Transport and insurance costs up to the port agreed with the buyer will be paid by the seller. The buyer assumes all the subsequent unloading, customs and transport costs and risks.
CPT - Carriage Paid To (named place of destination)
The seller delivers the goods to a destination agreed with the buyer (usually a maritime terminal, a carrier or directly to the buyer), assuming all the costs and risks of transport to the destination.
CIP - Carriage and Insurance Paid to (named place of destination)
All transport costs are borne by the seller. Unlike the CPT term, the insurance costs are also borne by the seller.
DAT - Delivered At Terminal / DAP - Delivered At Place (named place of destination)
The seller makes the goods available to the buyer on the arriving means of transport and delivers the goods to a named place of destination; the seller covers all the costs of transport up to the agreed point.
DDP - Delivered Duty Paid (named place of destination)
The seller makes the goods available to the buyer on the arriving means of transport and delivers the goods to a named place of destination; the seller assumes all the costs and risks of transport up to the agreed point .