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For those involved in international freight transactions, the following explanations of international standard trade definitions are useful in outlining risks and responsibilities between buyers and sellers.

This page highlights the Incoterms 2010 changes from Incoterms 2000.

Incoterms 2010
The International Chamber of Commerce has released the table of contents to the Incoterms 2010. Incoterms 2010 consists of only 11 Incoterms, a reduction from the 13 Incoterms 2000.

The Incoterms 2010 are organized into two categories:

Incoterms for any Mode or Modes of Transport:

  • EXW – Ex Works
  • FCA – Free Carrier
  • CPT – Carriage Paid To
  • CIP – Carriage and Insurance Paid
  • DAT – Delivered At Terminal
  • DAP – Delivered At Place
  • DDP – Delivered Duty Paid

Incoterms for Sea and Inland Waterway Transport Only:

  • FAS – Free Alongside Ship
  • FOB – Free On Board
  • CFR – Cost and Freight
  • CIF – Cost, Insurance and Freight

This interpretation is provided as a guide only.

Capture Seller/ Exporter/ Shipper Export Formalities & Fees Pre-Carriage Delivery at named place (Seller’s Side) Loading Alongside Vessel Onboard Ship or Vessel (Departure) Transport by Air, Rail or Ocean Onboard Ship or Vessel (Arrival) Discharge at Port of Arrival Delivery at Terminal (Buyer’s Side) Onward Carriage Import Formalities and Duties Buyer/ Importer/ Consignee
DEPARTURE: Seller makes goods available at named place
EXW Carriage Carriage of goods from the named place of delivery is arranged by the BUYER
EX Works Risks Risk transfers from SELLER to BUYER when the goods are made available to BUYER at SELLERS’s named place of delivery
(at named place of delivery Costs Costs transfer from SELLER to BUYER when the goods are made available to BUYER at SELLER’s named place of delivery
MAIN CARRIAGE UNPAID: Seller/ exporter is only responsible to deliver the goods to a carrier named by the buyer
FCA Carriage Pre-carriage, if any, is arranged by the SELLER Main Carriage is arranged by the BUYER or by the SELLER on behalf of the BUYER
Free Carrier Risks Risk transfers from the SELLER to the BUYER when the goods have been delivered to the CARRIER at the named place of delivery
(at named place of delivery Costs Cost transfers from the SELLER to the BUYER when the goods have been placed alongside the ship at the named port of shipment
FAS Carriage Pre-carriage is arranged by the SELLER Main carriage of the goods is arranged by the BUYER
Free Alongside Ship Risks Risk transfers from the SELLER to the BUYER when the goods have been placed alongside the ship at the named port of shipment
(at named port of shipment) Costs Cost transfers from the SELLER to the BUYER when the goods have been placed alongside the ship at the named port of shipment
FOB Carriage Pre-carriage is arranged by the SELLER Main carriage of the goods is arranged by the BUYER
Free On Board Risk transfers from the SELLER to the BUYER when the goods are loaded onboard the vessel athe the named port of shipment
(at named port of shipment) Costs Costs transfer from the SELLER to the BUYER when the goods are loaded onboard the vessel athe the named port of shipment
MAIN CARRIAGE PAID: The seller contracts and pays for carriage, but is not responsible for costs or risks once the goods have been shipped
CFR Carriage Carriage of the goods to the named port of destination is arranged by the SELLER Onward carriage is arranged by the BUYER
Cost and Freight Risks Risk transfers from the SELLER to the BUYER when the goods are loaded onboard the vessel at the named port of shipment (not destination)
(at named port of destination) Costs Costs transfer from the SELLER to the BUYER upon delivery at the named port of destination
CIF Carriage Carriage of the goods and insurance to the named port of destination Onward carriage is arranged by the BUYER
Cost , Insurance and Freight Risks Risk transfers from the SELLER to the BUYER when the goods are loaded onboard the vessel at the named port of shipment (not destination)
(at named port of destination) Costs Costs transfer from the SELLER to the BUYER upon delivery at the named port of destination
CPT Carriage Carriage of the goods to the named place of destination is arranged by the SELLER
Carriage Paid To Risks Risk transfers from the SELLER to the BUYER when the goods have been delivered to the (first) CARRIER
(at named port of destination) Costs Costs transfer from the SELLER to the BUYER at the named place of destination
CIP Carriage Carriage of the goods and Insurance to the named place of destination is arranged by the SELLER
Carriage and Insurance Paid to Risks Risk transfers from the SELLER to the BUYER when the goods have been delivered to the (first) CARRIER
(at named port of destination) Costs Costs transfer from the SELLER to the BUYER at the named place of destination
ARRIVAL: The seller is responsible for all costs associated with bringing goods to the named place or port
DAT Carriage Carriage of the goods to the named terminal at port or place of destination, unloaded, is arranged by the SELLER
Delivered At Terminal Risks Risk transfers from the SELLER to the BUYER when the goods are made available to the BUYER at the named terminal at port of place of destination
(at named terminal at port or place of destination) Costs Costs transfer from the SELLER to the BUYER when the goods are made available to the BUYER at the named terminal at port of place of destination
DAP Carriage Carriage of the goods to the named place of destination ready for unloading is arranged by the SELLER
Delivered at Place Risks Risk transfers from the SELLER ot the BUYER when the goods are made available ready for unloading at the named place of destination
(at named place of destination) Costs Costs transfers from the SELLER to the BUYER when the goods are made available ready for unloading at the named place of destination
DDP Carriage Carriage of the goods to the named place of destinationready for unloading is arranged by the SELLER
Delivered Duty Paid Risks Risk transfers from the SELLER to the BUYER when the goods are made available ready for unloading at the named place of destination
(at named place of destination) Costs Costs transfer from the SELLER to the BUYER when the goods are made available ready for unloading cleared for import at the named place of destination

Notes on Incoterms® 2010

1. Incoterms® 2010 are internationally accepted standard definitions of trade terms. Incoterms® were developed by the ICC, Paris France in 1936, and have been regularly revised to reflect changes in transportation and documentation. The current version is Incoterms® 2010.
2. Incoterms® 2010 are not implied into contracts. Buyers and Sellers must specify in their contranct that it is subject to Incoterms® 2010.
3. Incoterms® 2010 DO: a) apply to the sale of goods, b) specify each party’s obligations regarding carriage, risks and costs, and c) establish basic terms of transport and delivery
4. Incoterms® 2010 DO NOT: a) apply to contracts for services, b) define contractual rights other than for delivery, c) specify details of the transfer, transport and delivery of goods, d) determine how title to goods will transfer, e) protect seller or buyer from risk of loss, f) cover the goods before or after delivery, or g) define remedies for breach of contract.
5. “Delivery” in Incoterms® 2010 is used to “indicate where the risk of loss or damage to the goods passes from the seller to the buyer.”
6. “Pre-carriage” indicates the movement of goods prior to the main transport of the shipment.
7. “Onward carriage” indicates the movement of goods after the main transport of the shipment.
8. This guide is prepared for easy reference, based on “Guide to International Commercial Terms 2010″ by World Trade Press.