EXW Ex Works
- The seller/exporter makes the goods available to the buyer in their
own warehouse and is only responsible for packing the goods.
- The buyer/importer therefore bears all of the costs and
responsibilities from the moment the goods cross the warehouse prior to loading.
Insurance is not mandatory but should it be required it would be taken out by the
buyer as they bear the risk.
This Incoterm should not be used if the seller hands the goods over anywhere other
than their own premises. FCA Free Carrier
- The seller delivers the goods to an agreed place and bears the
costs and risks up to the point of delivery of those goods at the agreed place,
including the cost of export clearance. The seller is responsible for inland
transport and export customs clearance unless the designated place is the seller's
premises (FCA warehouse), in which case the goods are delivered there and loaded
onto the means of transport arranged by the buyer at the buyer's expense.
- The buyer bears the costs from loading on board to unloading,
including insurance if taken out because they bear the risk when the goods are
loaded onto the first means of transport.
for FCA, with respect to Incoterms 2010, is that in shipping the
buyer can ask their carrier to issue a Bill of Lading to the seller specifying "on board" as
proof of delivery of the goods, thus facilitating the use of documentary credits. The credit
is afforded to the seller by bank guarantee although they are not party to the contract of
carriage. FAS Free Alongside Ship
- The seller delivers the goods to the port of origin loading dock
and bears the costs up to delivery as well as being responsible for export customs
- The buyer is responsible for loading on board, stowage, freight and
other costs up to delivery at destination, including import clearance and insurance,
if taken out as it is not mandatory. The buyer also bears the risk once the goods
are in the loading dock prior to being loaded onto the ship.
This Incoterm is only valid for shipping and is generally used for special goods that
have particular loading requirements, not usually for palletised cargo or containers.
FOB Free On Board
- The seller bears the costs until the goods are loaded onto the
ship, at which point the risks are transferred as well as responsibility for export
clearance and costs at origin. The seller also arranges the transport although the
buyer bears the cost.
- The buyer is responsible for the cost of freight, unloading, import
clearance and delivery at destination as well as insurance should they take it out.
The transfer of risk occurs when the goods are on board.
This Incoterm is only used for shipping. It should not be used for goods in containers
because responsibility is transferred when goods are loaded on board the ship (the goods are
in physical contact with the ship's deck) and containers are not loaded on entering the
terminal, therefore, if the goods were to suffer any damage inside the container it would be
very difficult to establish when the damage occurred. CFR Cost and
- The seller is responsible for all costs until the goods arrive at
the destination port, including export clearance, costs at origin, freight and
usually unloading costs.
- The buyer is responsible for import procedures and transport to
destination. They also bear the risks from the moment the goods are on board, hence,
although it is not mandatory the buyer usually takes out insurance.
This Incoterm is only used in shipping. CIF Cost, Insurance and
- As with CFR the seller bears all the costs up to arrival at the
destination port, including export clearance, costs at origin, freight and usually
unloading. However, unlike CFR, the seller must also arrange insurance even though
the risks transfer to the buyer once the goods are loaded on board.
- The buyer bears the import and transport to destination costs.
in the 2020 version of this Incoterm is that the seller must
arrange insurance cover in line with what is stipulated in Institute Cargo Clauses (C). In
other words, the goods must be covered until their arrival at the destination port. This
Incoterm is only used in shipping. It is widely used as it determines the customs value.
CPT Carriage Paid To
- The seller bears the costs until the goods are delivered to an
agreed place, i.e., they are responsible for all of the costs at origin, export
clearance, the main transport and usually, costs at destination.
- The buyer is responsible for import procedures and insurance if
taken out as it is not mandatory. The risk is transferred to the buyer once the
goods are loaded onto the first means of transport arranged by the seller.
This Incoterm is valid for any means of transport. CIP Carriage
and Insurance Paid To
- The seller bears the costs up to delivery at an agreed place at
destination, i.e., the costs at origin, export clearance, freight and also insurance
which is mandatory.
- The importer is responsible for import clearance and delivery at
destination and takes on the risk when the goods are loaded onto the first means of
What is new
in this Incoterm with respect to Incoterms 2010 again
relates to insurance cover. In this instance, apart from being mandatory, insurance must
contain the same coverage as what is stipulated in Institute Cargo Clauses (A), the goods
must be insured until their delivery to the carrier at destination. DPU
Delivered at place Unloaded
- The seller bears the costs and risks arising at origin, packing,
loading, export clearance, freight, unloading at destination and delivery at the
- The buyer is responsible for import clearance procedures.
This Incoterm is new
and replaces DAT. In effect, it increases
delivery options since DAT stated that delivery must take place at the terminal, whereas
with the new DPU delivery can take place at an agreed place other than the terminal.
DAP Delivered At Place
- The seller bears all the costs and risks of the operation apart
from import clearance and unloading at destination, i.e., all costs at origin,
freight and inland transport.
- The buyer is only responsible for import clearance and unloading.
This Incoterm is valid for all means of transport. Insurance is not mandatory but if
taken out the seller bears the cost. DDP Delivered Duty Paid
- The seller bears all costs and risks from packing and checking in
their warehouses to delivery at final destination, including export and import
clearance, freight and insurance, if taken out.
- The buyer only has to receive the goods and usually unloads them,
although this can also be done by the seller.
This Incoterm is the exact opposite of EXW, the seller bears all the costs and risks.