Industry News | Expertise

Industry News | Expertise

EXW: Short for "Ex Works," meaning "delivered at the factory (specified location)." Under this term, the seller fulfills their delivery obligation by making the goods available at their premises (factory, workshop, warehouse, etc.) for the buyer.

FCA: Short for "Free Carrier," meaning "delivered to the carrier." The seller is responsible for export customs clearance and delivers the goods to the carrier designated by the buyer at the agreed time and place, notifying the buyer promptly.

CPT: Short for "Carriage Paid To," meaning "freight paid to the designated destination." The seller is responsible for arranging and paying for transportation to the destination. After handling export customs clearance, the seller must deliver the goods to the carrier at the agreed time and location, notifying the buyer.

CIP: Short for "Carriage and Insurance Paid To," meaning "freight and insurance paid to the designated destination." The seller arranges and pays for transportation to the destination, handles insurance, and pays the premium. After export customs clearance, the seller delivers the goods to the carrier at the designated shipping location to fulfill their delivery obligation.

DAT: Short for "Delivered At Terminal," meaning "delivered at the terminal (insert named terminal port or place of destination)." The seller delivers the goods to the agreed terminal by the contract date, unloading them from the arriving transport vehicle for the buyer.

DAP: Short for "Delivered At Place," meaning "delivered at the designated place of destination." The seller must sign a transport contract and pay for shipping to the specified destination. Delivery is completed when the seller places the goods on the arriving transport vehicle at the specified location for the buyer.

DDP: Short for "Delivered Duty Paid," meaning "delivered at the named place of destination." This means the seller handles import customs clearance and delivers the goods on the transport vehicle at the designated location. The seller assumes all risks and costs associated with transporting the goods, including any duties or fees required at the destination. Under EXW, the buyer bears the maximum responsibility, while under DDP, the seller bears the maximum responsibility. This term should not be used if the seller cannot obtain an import license.

FAS: Short for "Free Alongside Ship," meaning "delivered alongside the ship (specified port of shipment)." The seller is responsible for placing the goods at the dock or barge next to the ship at the port of shipment, thereby completing the delivery.

FOB: Short for "Free on Board" or "Freight on Board," meaning "delivered on board at the port of shipment (specified port)." The seller handles export customs clearance and delivers the goods on board the vessel designated by the buyer at the specified port and time, assuming all risks until the goods pass the ship's rail.

The risk transfer rules have been amended in the 2010 Incoterms. Once the goods are loaded onto the ship at the port of shipment, the risk transfers to the buyer.

CFR: Short for "Cost and Freight," meaning "cost plus freight." The seller is responsible for chartering a vessel and paying for freight to the destination port, loading the goods onto the ship by the specified shipping port and time, and notifying the buyer.

CIF: Short for "Cost, Insurance, and Freight," meaning "cost plus insurance and freight." The seller charters a vessel and pays for freight to the destination port, loads the goods onto the ship within the specified shipping port and time, and arranges and pays for cargo insurance.