Intercommunicate

Incoterms - International Commerce Terms

Incoterms or international commercial terms are international sales terms, published by the International Chamber os Commerce(ICC). These terms are used to share costs and responsability in the transport between buyer and seller.

Since 01 of January of 2011 is in effect the revision of 2010 Incoterms. As from this date, on all international forum proposals or contracts should be placed the expression "Incoterms 2010".
The incoterms don't apply to transport contract or insurance. Determine:
- Distribution and costs ;
- Delivery location of goods ;
- Who supports transport risks ;
- Responsability of customs duties .

Summary board:

There are 11 terms, and only these should be used.
- For any mode of transportation ( road, ocean, air and railroad), including multimodal:
EXW, FCA, CIP, CPT, DAP, DAP, DDP
- For transporting goods via ocean or river:
FAS, FOB, CFR, CIF

- Group «F» ( main transport unpaid ) and "C" ( main transport paid ), reflect deliveries in the origin.
- Group "D" ( delivered ) concerns deliveries at destination .

INCOTERMS 2010 are grouped into two classes:

1. TERMS FOR ANY TRANSPORT MODE

• EXW - EX WORKS (... named place of delivery)
o The Seller's only responsibility is to make the goods available at the Seller's premises. The Buyer bears full costs and risks of moving the goods from there to destination.

• FCA - FREE CARRIER (... named place of delivery)
o The Seller delivers the goods, cleared for export, to the carrier selected by the Buyer. The Seller loads the goods if the carrier pickup is at the Seller's premises. From that point, the Buyer bears the costs and risks of moving the goods to
destination.

• CPT - CARRIAGE PAID TO (... named place of destination)
o The Seller pays for moving the goods to destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage.

CIP - CARRIAGE AND INSURANCE PAID TO (... named place of destination)
o The Seller pays for moving the goods to destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage. The Seller, however, purchases the cargo insurance.

• DAT - DELIVERED AT TERMINAL (... named terminal at port or place of destination)
o The Seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the Buyer's disposal at a named terminal at the named port or place of destination. "Terminal" includes any place, whether covered or
not, such as a quay, warehouse, container yard or road, rail or air cargo terminal.
The Seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.

• DAP - DELIVERED AT PLACE (... named place of destination)
o The Seller delivers when the goods are placed at the Buyer's disposal on the arriving means of transport ready for unloading at the names place of destination.
The Seller bears all risks involved in bringing the goods to the named place.

• DDP - DELIVERED DUTY PAID (... named place)
o The Seller delivers the goods -cleared for import - to the Buyer at destination.
The Seller bears all costs and risks of moving the goods to destination, including the payment of Customs duties and taxes.

 

2. MARITIME-ONLY TERMS

• FAS - FREE ALONGSIDE SHIP (... named port of shipment)
o The Seller delivers the goods to the origin port. From that point, the Buyer bears
all costs and risks of loss or damage.

• FOB - FREE ON BOARD (... named port of shipment)
o The Seller delivers the goods on board the ship and clears the goods for export.
From that point, the Buyer bears all costs and risks of loss or damage.

• CFR - COST AND FREIGHT (... named port of destination)
o The Seller clears the goods for export and pays the costs of moving the goods to
destination. The Buyer bears all risks of loss or damage.

• CIF - COST INSURANCE AND FREIGHT (... named port of destination)
o The Seller clears the goods for export and pays the costs of moving the goods to
the port of destination. The Buyer bears all risks of loss or damage. The Seller,
however, purchases the cargo insurance.

Links of interest ( alphabetical order )

APAT – Associação dos Transitários de Portugal (view site)
AGEPOR – Associação dos Agentes de Navegação (view site)
ANTRAM –Associação Nacional de Transportadores Públicos Rodoviários de Mercadorias (view site)
APLOG – Associação Portuguesa de Logistica (view site)
CDO – Camara dos Despachantes Oficiais (view site)
DGAIEC – Direcção-Geral das Alfândegas e dos Impostos sobre o Consumo (view site)
ELA - European Logistics Association (view site)
FIATA - International Federation of Freight Forwarders Associations (view site)
IATA - The International Air Transport Association (view site)
ICC - International Chamber of Commerce (view site)
IMTT - Instituto da Mobilidade e dos Transportes Terrestres (view site)

Specialized Press (alphabetical order)

Cargo News (portuguese)
Journal of Commerce
World Cargo News