INCOTERMS are international rules of foreign trade established by the International Chamber of Commerce. Incoterms terms regulate the distribution of delivery costs between the supplier and the recipient, the place of delivery of the goods, the time of transfer of responsibility for possible damage or loss of the goods.
EXW (EX Works (… named place)) – shipment from the factory /place of manufacture. Pickup of goods from the manufacturer’s warehouse. Export duties are not paid.
FCA (Free Carrier (…named place)) – free carrier. The goods are delivered to the carrier’s warehouse, export duties are paid by the supplier. FAS (Free Alongside Ship) — the delivery of cargo to the vessel, without loading. Export duties are paid by the seller.
FOB (Free On Board (… named port of shipment)) – loaded on the ship. The goods were delivered to the port and loaded onto the ship. Export duties are paid by the supplier.
CFR (Cost and Freight (… named port of destination)) – delivered to the port and chartered ship. The supplier delivers the cargo to the port, charters the ship, and pays export duties. The buyer pays for insurance.
CIF (Cost, Insurance and Freight (… named port of destination)) – The supplier charters the ship, pay export duties, insure and deliver the cargo to the destination port.
CPT (Carriage Paid To (… named place of destination)) – shipping and export duties are paid (by the shipper), insurance is not paid. The difference from CFR is that CFR applies to water transport, while CPT applies to any type of transport.
CIP — Carriage and Insurance Paid To…) – export duties are paid, the goods are insured and delivered. The difference with CIF is that CIF applies to water transport, while CIP applies to any type of transport. DAT (Delivered at Terminal)— delivery of cargo to the buyer’s customs terminal. Import duties are paid by the buyer.
DPU — Delivered Named Place Unloaded) – delivery to the destination / unloading point. Import duties are paid by the buyer. Unloading of goods is paid by the seller.
DAP — Delivered at Place) – delivery to the destination. Import duties are paid by the buyer. Delivery is carried out before the goods are unloaded — when they are provided to the buyer on the arriving vehicle ready for unloading, unloading is paid by the buyer.
DDP (Delivered Duty Paid) — delivered, duties paid. The supplier assumes all obligations for transportation, cargo insurance, as well as payment of export and import duties.