Tools & Applications

Incoterms

Incoterms were created by the international Chamber of Commerce 1936. They have been updated as trade has evolved, to keep pace with international trade.

Their main purpose is to clearly define buyers and sellers responsibilities in an international contract of sale. As a result, risk of any legal complications or forgotten requirements are vastly reduced.

There are 13 Incoterms that allocate buyers and sellers responsibilities differently:

• EXW - Ex-Works, named place
• FCA - Free Carrier, named place
• FAS - Free Alongside Ship, named ocean port of shipment
• FOB - Free On Board Vessel, named ocean port of shipment
• CFR - Cost and Freight, named ocean port of destination
• CIF - Cost, Insurance and Freight, named ocean port of destination
• CPT - Carriage Paid To, named place or port of destination
• CIP - Carriage and Insurance Paid To, named place or port of destination
• DAF - Delivered At Frontier, named place of destination, by land, not unloaded
• DES - Delivered Ex-Ship, named port of destination, not unloaded
• DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared
• DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared
• DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared