INCO Terms are internationally accepted commercial terms defining the
respective roles of the buyer and seller in the arrangement of transportation
and other responsibilities, and clarify when the ownership of the merchandise
takes place. They are used in conjunction with a sales agreement or other
method of transacting the sale. Below is an example of how INCO Terms
work in action. The definitions provided here are the most common uses
of each term, but are not the only way these terms are used. Pay close
attention to the location listed for each term, as this indicates where
payment details change from Shipper to Consignee.
EXW (Ex Works) - (factory, mill, warehouse: your door) Title
and risk pass to buyer including payment of all transportation and
insurance cost from the seller's door. Used for any mode of transportation.
|
FCA (Free Carrier) - (pick a place after your origin to start)
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) - (port, after all origin port
charges) 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. |
FOB (Free On Board) - (port-same as FAS) Risk pass to buyer
including payment of all transportation and insurance cost once delivered
on board the ship by the seller. Used for sea or inland waterway transportation.
|
CFR (Cost and Freight) - (destination port-paid to arrival
at destination port) Title, risk and insurance cost pass to buyer
when delivered on board the ship by seller who pays the transportation
cost to the destination port. Used for sea or inland waterway transportation.
|
CIF (Cost, Insurance and Freight) - (destination port-same
as CFR, but includes insurance) Title and risk pass to buyer when
delivered on board the ship by seller who pays transportation and
insurance cost to destination port. Used for sea or inland waterway
transportation. |
CPT (Carriage Paid To) - (place at destination-includes all
destination port charges) Title, risk and insurance cost pass to buyer
when delivered to carrier or seller who pays transportation and insurance
cost to destination. Used for any mode of transportation. |
CIP (Carriage and Insurance Paid To) - (place at destination-same
as CPT, but includes insurance) Title and risk pass to buyer when
delivered to carrier by seller who pays transportation and insurance
cost to destination. Used for any mode of transportation. |
DAF (Delivered to Frontier) - (border of country-same as
paid by seller to border-all other charges to buyer) Title, risk and
responsibility for import clearance pass to buyer when delivered to
named border point by seller. Used for any mode of transportation.
(border of country-same as paid by seller to border-all other charges
to buyer) 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) - (on board ship to destination port)
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) - (destination port-includes
duties and taxes, but not destination charges or delivery) 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) - (consignee door-excluding duties
and taxes) 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.
|
DDP (Delivered Duty Paid) - (consignee door-includes all
charges origin to destination) Title and risk pass to buyer when seller
delivers goods to named destination point cleared for import. Used
for any mode of transportation. |