MADE EASY e-GUIDE

to
INCOTERMS

2010
Published by
Import Export Made Easy
Version 1 February 2011
XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

What you will find in the Made Easy e-Guide.
This77pageeGuidetothe2010versionofIncotermsisanessentialcompaniontothecoreICC
publication,Incoterms2010Rules,whichliststherulesbutdoesnotexplaintheimplicationsfor
partiesinvolvedintheshipmentofgoods.
ThisiswheretheMadeEasyeGuidefillsthegap,providingcriticalexplanationforallwhoneedto
useorunderstandtherulestraders,export/importandlogisticsmanagers,freightforwarders,
shippingcompanies,lawyersandbankers.
Writtenbytwointernationaltradeexpertsandpractitioners(CorinneCampbellofXDOCandLance
ScoularofKeyDirections),theMadeEasyeGuidecovers:
Descriptionoftheterms
Rulesgoverninguseofthetermsandwhattheycover
BuyerandSellerResponsibilities
RulesforInternationalandDomesticcontractsofsale
Howtousetherulescorrectly
Howtochoosetherightruleforyourcontractofsale
Risksassociatedwitheachterm
Guide format:
Theformatofthisguidehasbeendesignedforeaseofuse.Eachofthe11Incotermsrulesis
individuallyexplainedineasytofollowsections:
Definition
ResponsibilitiesofSellerandBuyer
Checklistofobligations
Casestudies/practicalscenarios
Charts
Remarks:
Theguidehasalistofremarksdividedinto5categoriesforeachspecificIncotermsrule.Thisis
designedtohelpyoutodecideontheIncotermsrulebestsuitedtoyourrequirements.
Positives Whatarethebestpractices
Concerns Whenusageisnotrecommended
Considerations Whattoconsider
Negotiables Whattoincludeinyournegotiationsandcontracts
Insurance Whattoconsiderwheninsuringyourshipmentbeforeandduringtransit
XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

Incoterms

2010 Rules explained.

EachIncoterms2010ruleisexplainedinfiveways:byanoutlineoftheresponsibilitiesofSeller
andBuyer,throughachecklist,withremarksandtips,casestudiesandcharts.Thisapproachmakes
iteasytoabsorbtheinformationandcreatesavaluablequickreferencetool.
Responsibilities of Seller and Buyer:
Atableisincludedforeachofthe11Incoterms2010rulesandsetsoutclearlythespecificactions
tobetakenbybothSellerandBuyer.Italsoidentifiesanypartintheprocesswhichrequires
particularattention.
Example:
RESPONSIBILITY
OFSELLER

Supplygoodsanddocumentsasagreed
Packandmarkasagreedandrequired
Selectwheregoodsareavailableforcollection
Makegoodsavailableatagreedplaceanddate
Givetimelynoticeofgoodsavailability
ProvideBuyerinformationonexportdocumentation
ProvideBuyerinformationonexportprocedures/documents

RESPONSIBILITY
OFBUYER

AdviseSellerwhengoodswillbecollected
CollectgoodswhenplacedatdisposalbySeller
Loadgoods
Provideevidenceofhavingpickedupthegoods
Arrangealltransporttofinaldestination
Clearforexport(ifneeded)
Clearforimport(ifneeded)

RISKS

TransfersfromSellertoBuyerwhengoodshavebeenmadeavailableat
agreedplaceanddate

Checklist:
Achecklistisincludedforeachofthe11Incoterms2010rulesandprovidesavaluableandsuccinct
methodofcheckingthatyouhaveaccountedforeverything.
Example:
Obligations Seller Buyer
ProvideCommercialDocuments

ExportLicenses,Authorizations,SecurityClearances&otherformalities

AssistanceinExport

ContractofPremaincarriageinSellersCountry

ContractofMainCarriageinSellersCountry

LoadinggoodsatTerminal/Place

Loadingcost

ContractofInsuranceObligation
Provideinformationtoobtaininsurance

PremainTransportrisk

MainTransportrisk

UnloadingatTerminal/PlaceatSellerscountry

ExportDuties,TaxesandCustomsformalitycosts

ImportLicenses,Authorizations,SecurityClearances&otherformalities

AssistanceinImport

ContractofCarriageinBuyersCountry

Unloadinggoodsatagreedplace

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules
Remarks:
Atableofcommentsisincludedforeachofthe11Incoterms2010rules.Thisoutlinesthebest
circumstancesforapplyingtherule,alertstheusertoanynegativeaspectsoftheparticularrule,
identifiesparticularareasforconsiderationwhendecidingwhichruletouseandwhattoincludein
thecontract,andincludesremarksaboutinsurancerequirements.
Example:

TobeusedinsteadofCFRwhenusingcontainers
Sellerpaysmaincarriagetodestinationbutdoesntcarrythe
transportrisk
Underaletterofcredit,Sellerminimisesriskbyhavingcontrolof
shippingdateandshippingdocuments

BuyerhasmaincarriageriskwhilefreightiscontrolledbySeller

BuyershouldassessifSellersfreightratemarginisexcessive
IfSellerhasadequatemarineinsurancecover,considerusingCIP

SpecifyplacewhereSellerdeliverstocarrier(countryofSeller)
Specifyprecisefinalnamedplaceofdestination

Agreeonwhichparty,ifany,arrangesmarineinsurance
Bothpartieshaveanobligationtoprovideinformationtoenable
otherpartytoarrangemarineinsurance
Considercoveringpreandpostshipmentrisk

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules
Case Studies: Atleasttwopracticalscenariosareincludedforeachrule.
Example:
Scenario:GermanengineeringcompanysellsaLCLcontainershipmentof12boxesspareparts
12M3measurementtoaminingcompanyinJohannesburg,SouthAfrica.

TermsofSale:CPTJohannesburg,SouthAfrica:DeliverytoContainerPackingDepot,16Landenberg
Strasse,Hamburg,Germany.Finaldestination:JohannesburgContainerUnpackingDepot,15Protea
Place,Johannesburg,SouthAfrica.

ModeofTransportForMainCarriage:Sea(containervessel)

TypeofTrade:International

InsuranceObligations:NilforBuyerandSeller.Ifagreed,specifyincontractofsalewhichparty
insuresthegoods.
ExportCountryObligationsincludingDutiesandTaxes:Seller

ImportCountryObligationsincludingDutiesandTaxes:Buyer

SellersRisk:UptodeliverytoLCLpackingdepotinSellerscountry.

SellersCosts:CostofdeliverytocontainerpackingdepotinSellersCountry,packinggoodsinto
consolidationcontainer,loadingontovesselandallsubsequentcoststoBuyersunpackingdepot.

BuyersRisk:FromreceiptatLCLpackingdepotinSellerscountry.

BuyersCosts:AllcostsfromLCLunpackingdepotinBuyerscountry(includingcontainerunpacking
charges)andallsubsequentcoststoBuyerspremises.
Charts: Graphicsareincludedtoillustrateeachscenario.Sellerresponsiblitiescorrelatedwith
costsaredepictedinblue;Buyerresponsibilitiescorrelatedwithcostsareinorange.
Example:

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules
XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules
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Incoterms2010bytheInternationalChamberofCommerce(ICC)andanyofitsvariantsare
trademarksorregisteredvariantsoftheInternationalChamberofCommerce(ICC).
Thispublication,ourcomments,opinionsorothercontent,arenotsponsored,affiliatedortestedby
theICC;werecommendyourefertotheICCofficialpublicationofIncoterms2010ICCrules715.
TheInternationalChamberofCommerce,theworldbusinessorganisationbasedinParis,isthe
globalleaderinthedevelopmentofstandards,rulesandreferenceguidesforinternationaltrade.
ICCPublicationsavailableatICCBusinessBookstorewww.iccbooks.com