FOREIGN TRADE AGENCY SERVICES

METHODS OF DELIVERY IN INTERNATIONAL TRADE

"INCO TERMS 2000"

means that the seller delivers when the goods pass the ship's rail in the port of shipment. The
Cost, Insurance and
seller must pay the costs and freight necessary to bring the goods to the named port of
Freight
CIF destination .The CIF term requires the seller to clear the goods for export. This term can be
(... named port of
used only for sea and inland waterway transport. If the parties do not intend to deliver the
destination)
goods across the ship's rail, the CIP term should be used.

means that the seller delivers when the goods pass the ship's rail at the named port of
Free On Board shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the
FOB (... named port of goods from that point. The FOB term requires the seller to clear the goods for export. This
shipment) term can be used only for sea or inland waterway transport.If the parties do not intend to
deliver the goods across the ship's rail, the FCA term should be used.

NB : The implications and the interpretations of Inco terms which have been revised/ puplished in different years may differ from one another.
Therefore the year of the revised puplication of the Inco terms has to be stated along with the Inco term used in the offers/ quotations in order
to clarify the seller's and buyer's responsibilities and for this reason the reader is recommended to read carefully the seller's and buyer's
responsibilities of each term before using it and then state the revised publication year of the inco term along with the term in their
offer/quotations, e.g. Delivery Term : FOB Istanbul Inco Terms 2000.
Or

Free on board (FOB): the goods are placed on board the vessel by the seller at the port of shipment specified
in the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship's rail.

Cost, Insurance and Freight (CIF): the exporter pays the cost of goods, cargo and insurance plus all
transportation charges to the named port of destination.

Also see www.i-b-t.net/incoterms.html

 The 13 INCOTERMS
Origin Terms

EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.
The seller will not contract for any transportation.

International Carriage NOT Paid by Seller

FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not
loaded.
This term can be used for any mode of transport.

FAS - Free Alongside Ship, named ocean port of shipment.

Ocean shipments that are NOT containerized.

FOB - Free On Board vessel, named ocean port of shipment.

This term is used for ocean shipments only where it is important that the goods pass the ship's rail.

International Carriage Paid by the Seller

CFR - Cost and Freight, Named ocean port of destination.

This term is used for ocean shipments that are not containerized.

CIF - Cost, Insurance and Freight, named ocean port of destination.

This term is used for ocean shipments that are not containerized.

CPT - Carriage Paid To, named place or port of destination.

This term is used for air or ocean containerized and roll-on roll-off shipments.

CIP - Carriage and Insurance Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.

Arrival At Stated Destination

DAF - Delivered At Frontier, named place of destination, by land, not unloaded.

This term is used for any mode of transportation but must be delivered by land.

DES - Delivered Ex-Ship, named port of destination, not unloaded.

This term is used for ocean shipments only.
DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.
This term is used for ocean shipments only.

DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term is used for any mode of transportation.

DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term is used for any mode of transportation.

"INCOTERMS 2000" is one in a series of short articles published by International Business Training, a division of InterMart, Inc. These
articles are designed to help businesses and individuals succeed in the global marketplace.

For more information about a variety of import and export publications, self-study courses and seminars designed specifically for small
and mid-sized companies, visit our web page at www.i-b-t.net.

The laws, regulations, procedures, requirements, methods, interpretations and other information contained in this article are subject to
change and therefore the reader should not rely solely on this guide in dealing with the commercial laws of the United States or foreign
countries. Errors and omissions, typographical, clerical and otherwise, sometimes occur and it is possible that errors have occurred in
respect to anything printed in this article.

(c) 2000 International Business Institute, Inc.

Used with permission by InterMart, Inc., PO Box 22267, Eagan, MN 55122-0267
INCOTERMS 2000 - Chart of Responsibility

When negotiating an international sales contract, both parties need to pay as much attention to the terms of sale as to the sales price.
To make it as clear as possible, an international set of trade terms (INCOTERMS) has been adopted by most countries that defines
exactly the responsibilities and risks of both the buyer and seller including while the merchandise is in transit. //////The following chart
summarizes the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS. In addition, a definition for each
term is included at the bottom of the page. For a more complete description of each of the INCOTERMS, The IBT Guide to
INCOTERMS 2000 book published by International Business Training fully and clearly defines each of the new INCOTERMS that became
effective January 1, 2000, and includes a number of case studies that demonstrate the use of the different terms in real-life situations.

EXW FCA FAS FOB CFR CIF CPT CIP DAF DES DEQ DDU DDP
Delivered
Free Free Cost Carriage Delivered Delivered
Free Cost & Carriage Delivered Delivered Ex Quay
SERVICES Ex Works Alongside Onboard Insurance Insurance Duty Duty
Carrier Freight Paid To At Frontier Ex Ship Duty
Ship Vessel & Freight Paid To Unpaid Paid
Unpaid
Warehouse
Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Storage
Warehouse
Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Labor
Export
Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Packing
Loading
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Charges
Inland Buyer/
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Freight Seller*
Terminal
Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Charges
Forwarder's
Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller
Fees
Loading On
Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Vessel
Ocean/Air
Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller
Freight
Charges
On Arrival
Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Buyer Buyer Seller Seller Seller
At
Destination
Duty, Taxes
& Customs Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller
Clearance
Delivery To
Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller
Destination

* There are actually two FCA terms: FCA Seller's Premises where the seller is responsible only for loading the goods and not responsible
for inland freight; and FCA Named Place (International Carrier) where the seller is responsible for inland freight.