INCOTERMS

Incoterms (an abbreviation for International Commercial Terms) are internationally accepted standard trade definitions which describe the selling/buying terms between the shipper and the consignee. Among the best known Incoterms are EXW (Ex works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid) and CPT (Carriage Paid To). Explanation of all Incoterms as follows:

EXW (Ex Works) - The seller fulfills his obligation to deliver when he has made the goods available
at his premises to the buyer. The buyer bears all the risk and costs to load, clear the goods for export, transport and insure the goods to final destination.

FOB (Free On Board) The seller has fulfilled his obligation to deliver when goods have passed over the ships rail at the named port of shipment. All costs and risks of loss or damage pass to the buyer from that named point. CFR/CIF (Cost & Freight / Cost Insurance Freight) - This term means that in addition to the delivery of goods onto the vessel, the seller must pay the costs and freight necessary to bring the goods to the nominated port of destination. CIF term adds the element of insurance where the seller is responsible for above and for obtaining and paying the insurance CPT/CIP (Carriage Paid To / Carriage & Insurance Paid To) - The seller is responsible for delivering
goods to a carrier and to pay the freight for carriage of the goods to the named destination. All risk and additional costs transfer to the buyer once the goods are in the custody of the carrier. Under CIP terms the seller is also responsible for obtaining cargo insurance against the buyers risk of loss or damage to goods during carriage.

DDP (Delivered Duty Paid) - This means the sellers obligation is fulfilled when the goods have been made available to the buyer at the specified destination. The seller is responsible for all costs, insurance and risks involved in delivering of the goods, including the customs clearing at destination, costs of duties, taxes and other charges involved. FCA (Free Carrier) - Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's obligation to receive the Seller's arriving vehicle unloaded. FAS (Free Alongside Ship) - Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller. DAF (Delivered to Frontier) - Title, risk and responsibility for import clearance pass to buyer when
delivered to named border point by seller. Used for any mode of transportation.

DES (Delivered Ex Ship) - Title, risk, responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation. DEQ (Delivered Ex Quay i.e. Duty Paid) - Title and risk pass to buyer when delivered on board the ship at the destination point by the seller who delivers goods on dock at destination point cleared for import. Used for sea or inland waterway transportation. DDU (Delivered Duty Unpaid) - Title, risk, and responsibility for vessel discharge and import
clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation. For correct current usage please refer to International Chamber of Commerce texts: http://www.iccwbo.org/incoterms/id3043/index.html