What are the Incoterms® rules?
Incoterms® are rules created by the ICC (International Chamber of Commerce), internationally recognized, delimit responsibilities between the buyer and seller and establish how the costs of international commercial transactions will be allocated.
INCOTERMS that begin with an E:
They are the starting ones, that is, the buyer takes care of everything, the seller simply makes the merchandise available.
INCOTERMS that start with an F:
whose main transport is not paid by the seller, it is the buyer who will have to pay.
INCOTERMS that begin with a C:
Where the main transportation is paid by the seller.
INCOTERMS that begin with a D:
Arrival, that is, the buyer does not take care of anything, everything is managed and paid by the seller.
The new INCOTERMS 2020 came into effect on January 1, 2020. They will regulate future exchanges between buyers and sellers for the next decade.
EXW
Ex Work (place). Any means of transportation. The seller delivers when the goods available to the buyer at the seller’s premises or another named place not cleared for export and not loaded on any collecting vehicle.
FCA
Free Carrier (named place). Any means of transportation. The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. Seller is not responsible for the discharge if it occurs off campus.
FAS
Free Alongside Ship (named port of shipment). Transport by sea and waterways. The seller delivers when the goods are placed alongside the vessel at the port of shipment. The seller is the one who shipped the goods for export.
FOB
Free on Board (named port of shipment). Transport by sea and waterways. The seller delivers when the goods pass the ship’s rail at the port of shipment.
CPT
Carriage Paid To (named place of destination). The seller delivers the goods to the carrier nominated by him but also must pay the costs of carriage necessary to bring the goods to the agreed destination. Buyer assumes all risks and any other costs occurring after the goods have been so delivered. The CPT requires the seller to clear the goods for export. This term may be used irrespective of the mode of transport including multimodal transport.
CIP
Carriage and Insurance Payment To (named place of destination). The seller delivers the goods to the carrier nominated by him but also must pay the costs of carriage necessary to bring the goods to the agreed destination. The seller also has to procure insurance against the risk borne by the buyer, the loss or damage to the goods during transport. Buyer assumes all risks and any other costs occurring after the goods have been so delivered. The CPT requires the seller to clear the goods for export. This term may be used irrespective of the mode of transport including multimodal transport.
CFR
Cost and Freight (named port of destination). Transport by sea and waterways. The seller delivers when the goods pass the ship’s rail at the port of shipment. The seller must pay the costs and freight to the port of destination but the risk of loss is transferred from the seller to the buyer once delivery made.
CIF
Cost, Insurance and Freight (named port of destination). Transport by sea and waterways. CIP for any type of transportation. The seller delivers when the goods pass the ship’s rail at the port of shipment. The seller must pay the cost, insurance and freight to the port of destination but the risk of loss is transferred from the seller to the buyer once delivery made.
DES
Delivered Ex Ship (named port of destination). Transport by sea and waterways. The seller delivers when the goods are placed at the disposal of the buyer on board the ship at the port of destination not cleared for import.
DEQ
Delivered Ex Quay (named port of destination). Transport by sea and waterways. The seller delivers when the goods are placed at the disposal of the buyer on the quay of the port of destination not cleared for import.
DDU
Delivered Duty Paid (named place of destination). Any means of transportation. The seller delivers when the goods available to the buyer not cleared for import and not unloaded from the means of transport at the place of destination.
DDP
Delivered Duty Paid (named place of destination). Any means of transportation. The seller delivers when the goods available to the buyer on the means of transport not unloaded at the named place of destination, cleared for importation.