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Incoterms are internationally accepted commercial terms, developed in 1936 by the

International Chamber of Commerce (ICC) in Paris. Incoterms 2000 define the respective
roles of the buyer and seller in the agreement of transportation and other responsibilities
and clarify when the ownership of the merchandise takes place. These terms are
incorporated into export -import sales agreements and contracts worldwide and are a
necessary part of foreign trade.

Incoterms are used in union with a sales agreement or other methods of sales
transactions and define the responsibilities and obligations of both, the exporter and
importer in Foreign Trade Transactio ns.

The main objectives of Incoterms 2000 revolve around the contract of Foreign Trade
concerned with the loading, transport, insurance and delivery transactions. Its main function
is the distribution of goods and regulation of transport charges.

Another significant role played by Incoterms is to identify and define the place of
transfer and the transport risks involved in order to justify the ownership for support and
damage of goods by shipments sent by the seller or the buyer in an event of execution of
transport.

Incoterms make international trade easier and help traders in different countries to
understand one another. These International Commercial Terms are the most widely used
international contracts protected by the ICC copyright.

Incoterms safeguard the following issues in the Foreign Trade contract or

International Trade Contract:

(a) To determine the critical point of the transfer of the risks of the seller to the
buyer in the process forwarding of the goods (risks of loss, deterioration, rob bery of
the goods) allow the person who supports these risks to make arrangements in
particular in term of insurance.

(b) To specify who is going to subscribe the contract of carriage that is to say the
seller (exporter) or the buyer (importer).

(c) To distribute between the seller and the buyer the logistic and administrative
expenses at the various stages of the process.

(d) It is important to define who is responsible for packaging, marking, operations

of handling, loading and unloading, inspection of th e goods.

(e) Need To confirm and fix respective obligations for the achievement of the
formalities of exportation and importation, the payment of the rights and taxes of
importation as well as the sending of the documents. In dealing Foreign Trade there
are 13 Incoterms globally adopted by the International Chamber of Commerce
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Incoterms or International commercial terms make trade between different countries

easier. International Commercial Terms are a series of international trade terms that are
used are used worldwide to divide he transaction costs and responsibilities betwee n the
seller and the buyer.

Incoterms directly deal with the questions related to the delivery of the products from
the seller to the buyer. This includes the carriage of products, export and import
responsibilities, who pays for what and who has the risk for the condition of the pr oducts at
different locations within the transport process.

c Incoterms deal with the various trade transactions

all over the world and clearly distinguish between the respective responsibilities of the seller
and the buyers.

Departure of goods by international transport with the risks and dangers to the Seller
(Exporter) and Buyers (Importers)



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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.

 : In EXW shipment terms the Seller (Exporter) provides the goods for collection by the
Buyer (Importer) on the seller or exporter's promise. Responsibility for the seller is to put the
goods, in a good package which is adaptable and disposable by the transport.
&' : The buyer or Importer arranges insurance for damage transit goods. The Buyer or
importer has to bear all costs and risks involved in shipment transactions.
(However, if the parties wish the seller to be responsible for the loading of the goods on
departure and to bear the risks and all the costs of such loading, this should be made clear by
adding explicit wording to this effect in the contract of sale. )

(#( ) 


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 Buye r's
obligation to receive the Seller's arriving vehicle unloaded.
Seller : The Seller¶s responsibility is to deliver the goods into the custody of the transporters at
defined points. It is important for the chosen place of delivery to have an impact on the
obligations of loading and unloading the goods.
Buyer : The Buyer nominates the means of transport or shipping mode and pays the shipment
charges.
The seller and the buyer agree upon the place for delivery of goods. If the buyer nominates a
person other than a carrier or transporter to receive the goods, the seller is deemed to fulfill his
obligation to deliver the goods when they are delivered to th at person.
(
#(* 
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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 rest s with the seller.
In FAS has price includes all the costs incurred in delivering the goods alongside the vessel at
the port or nominated place of the buyer but there is not applicable charges to the seller for
loading the goods on board of vessel and no o cean freight charges and marine insurance.
Seller: The responsibility of the seller are fulfilled when the goods are placed cleared along the
ship.
Buyer: Buyer or Importer bear all the expenses and risks of loss or damage of transit goods
which are delivered along the ship.

(&#(&

The FOB (Free on Board) price is inclusive of Ex -Works price, packing charges, transportation
charges upto the place of shipment.
Seller also responsible for o clear customs dues, quality inspection charges, weight
measurement charges and other export related dues. It is important that the shipment term in
the Bill of Lading must carry the wording "Shipped on Board' it must bear with signature of
transporter or carrier or his authorized representative with the date on which goods were
"Boarded".
Seller :Seller responsible for clear customs dues, quality inspection charges, weight
measurement charges and other export related dues. It is important that the shipment term in
the Bill of Lading must carry the wordin g "Shipped on Board' it must bear with signature of
transporter or carrier or his authorized representative with the date on which goods were
"Boarded".
Buyer : The buyer indicates the ship and pays freight, transfer expenses and risks is done
when the goo ds passes or forwarding to the buyers warehouse by rail or ship.

(#( *

In this term the exporter bears the cost of carriage or transport to the selected destination port,
in this term the risk transferable to the buyers at the port of shipment.
Seller: The chooses the carrier, concludes and bears the expenses by paying freight to the
agreed port of destination, unloading not included. The loading of the duty -paid goods on the
ship falls on him as well as the formalities of forwarding. O n the other hand, the transfer of
risks is the same one as in FOB.
Buyer: The buyers supports all the risk of transport, when the goods are delivered aboard by
ship at the loading port, buyer receives it from the carrier and takes delivery of the goods fro m
nominated destination port.

c(#+c( * 

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.
This Term involves insurance with FOB price and ocean freight. The marine insurance is
obtained by the exporter at his cost against the risk of loss or damage to the goods during the
carriage.
Seller: The CFR extends additional obligation to the seller for prov iding a maritime So
insurance against the risk of loss or damage to the goods. The seller pays the insurance
premium.
Buyer: He supports the risk of transportation, when the goods have been delivered aboard the
ship at the loading port. He takes delivery o f the goods from the carrier to the appointed port or
destination.


# * 


Title, risk and insurance cost pass to buyer when delivered to carrier by seller who pays
transportation cost to destination. Used for any mode of transportation.
This term uses land transport by rail, road and inland waterways. The seller and exporter are
responsible for the carriage of goods to the nominated destination and have to pay freight up
the first carrier.
Seller: The seller or exporter controls the supply chain after paying customs clearance for
export. Seller or Exporter select the carrier and pay the expenses up to the destination.
Buyer: The risks of goods damages or loss are supported by the buyer as goods are given by
the first carrier. The buyer or importer has to pay importation customs clearance and the
unloading costs.
 c# *c 
 

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.
This term is similar to Carriage Paid To but the seller has to arrange and pay for the insurance
against the risk or loss or damage of the goods during the shipment.
Seller: The seller or buyer has to provide insurance and selle r pays the freight and insurance
premium.
Buyer: The buyer or importer supports the risks of damages or loss, as goods are given to the
first carrier. The buyer has to pay customs clearance and unloading charges.

(# ,( 

Title, risk and responsibility for import clearance pass to buyer when delivered to named
border point by seller. Used for any mode of transportation.
This term is used when the goods are to be carried by rail or road.
Seller : The seller is responsible to make the goods available to the buyer by the carrier till the
customs border as defined in sales contract.
Buyer : The buyer takes delivery of the goods at the contract agreed point border and he is
responsible for bearing al l customs formalities.


# ,$#
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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.
Seller: The seller is responsible to make the goods available to the buyer up to the named
quay or after crossing the customs border.
Buyer: The buyer takes delivery of the goods from ship at destination port and pays the
expenses of unloading.

-# ,$#-'

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.

# ,') 

Seller fulfills his obligation when goods have been made available at the named place in the
country of importation.
Seller: The seller is responsible for all transportation cost and accept the customs duty and
taxes as per defined in customs procedures.
Buyer: The buyer is responsible of the importation customs formalities.

# ,' 

Title and risk pass to buyer when seller delivers goods to the named destination point cleared
for import. Used for any mode of transportation.
Seller: The seller is responsible to make the goods available to the buyer at his risk and cost
as promised by the buyer. All the Taxes and duty on importation is promised by the buyer to
the seller.
Buyer: The buyer is responsible to take delivery at a nominated place and pays the expenses
for unloading of goods.


   
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! BAF Bunker adjustment factor
! BKO Booking Office
! B/L Bill of lading
! CAF Currency adjustment factor
! C and F Cost and Freight
! CBR Commodity Box Rate
! CFSContainer Freight Station
! CIF Cost Insurance Freight
! CIP Carriage and Insurance Paid To
! CKD Completely Knocked Down
! C/L Container Load
! COD Change of destination
! CPT Carriage Paid to
! CSP Container Service Port
! CST Container Service Tariff
! CT Conference Terms
! CTB Combined Transport Bill of lading
! CY Container Yard
! DAFDelivered at Frontier
! DDPDelivered Duty Paid
! DES Delivered Ex Ship
! DEQDelivered Ex Quay
! DGR Dangerous Goods Request
! DIC Delivery in Charges
! D/O Delivery Order
! DS Department Store
! ECD Empty Container Depot
! EDI Electronic Data Interchange
! EIF Equipment Investor Factor
! EQR Equipment Request
! ETA Estimated Time of Arrival
! ETD Estimated Time of Departure
! EXWEx Work
! EZC European ZOne Charge
! FAK Freight All Kinds
! FCAFree Carrier
! FCL Full Container Load
! FEU Forty Foot Equivalent Unit
! FIO Free In and Out
! FILO Free In lIner Out
! FOB Freignt On Board
! GSCR General Special Cargo
Request
! IMO InterGovernmental Maritime
Consultant Organization
! ISO International Standard
Organization
! L/C Letter of Credit
! LCL Less than Container Load
! LIFO Liner in Free Out
! M Measuremnet
! MCBR Mixed Commodity Box Rates
! NAI Net All In
! NNW Non Negotiable Waybill
! NOE Not Otherwise Enumerated
! NTANon Tariff Agreement
! NTRNon Tariff Rate
! OH Over Height
! OL Over Length
! OOG Out Of Gauge
! OW Over Width
! PLOA Place of Acceptance
! PLOD/POD Place of Delivery
! PLOR Place of Receipt
! POL Place of Loading
! RCR Reefer Cargo Request
! SCQ Special Commodity Quotation
! SITC Standard International Trade
Classification
! SISCQ Sundry Items Special
Commodity Quotation
! TCSP Trough Container Service Port
! TEU Twenty Foot Equivalent Unit
! THC Terminal Handling Charge
! T/S Transshipment
! W Weight
! W/M Weight / Measurement
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 The seller hands over the goods, cleared for export, into the custody of the first
carrier (named by the buyer) at the named place. This term is suitable for all modes
of transport, including carriage by air, rail, road, and containerised / multi -modal sea
transport. This is the correct "freight collect" term to use for sea shipments in
containers, whether LCL (less than container load) or FCL (full container load).
FAS Free Alongside Ship (named loading port)
The seller must place the goods alongside the ship at the named port. The seller
must clear the goods for export. Suitable only for maritime transport only but NOT for
multimodal sea transport in containers (see Incoterms 2010, ICC publication 715).
This term is typically used for heavy-lift or bulk cargo.
FOB Free on board (named loading port)
The seller must themself load the goods on board the ship nominated by the buyer,
cost and risk being divided at ship's rail. The seller must clear the goods for export.
Maritime transport only but NOT for multimodal sea transport in containers (see
Incoterms 2010, ICC publication 715). The buyer must instru ct the seller the details
of the vessel and port where the goods are to be loaded, and there is no reference
to, or provision for, the use of a carrier or forwarder. It  include Air transport.
This term has been greatly misused over the last three decades ever since
Incoterms 1980 explained that FCA should be used for container shipments.

)   *) 

CFR or CNF Cost and Freight (named destination port)
Seller must pay the costs and freight to bring the goods to the port of destin ation.
However, risk is transferred to the buyer once the goods have crossed the ship's rail.
Maritime transport only and Insurance for the goods is NOT included. Insurance is at
the Cost of the Buyer.
CIF Cost, Insurance and Freight (named destination p ort)
Exactly the same as CFR except that the seller must in addition procure and pay for
insurance for the buyer. Maritime transport only.
CPT Carriage Paid To (named place of destination)
The general/containerised/multimodal equivalent of CFR. The selle r pays for
carriage to the named point of destination, but risk passes when the goods are
handed over to the first carrier.
CIP Carriage and Insurance Paid (To) (named place of destination)
The containerised transport/multimodal equivalent of CIF. Seller pays for carriage
and insurance to the named destination point, but risk passes when the goods are
handed over to the first carrier.

) ,

DAF Delivered At Frontier (Deliveplace)
This term can be used when the goods are transported by rail and road. The seller
pays for transportation to the named place of delivery at the frontier. The buyer
arranges for customs clearance and pays for transportation from the frontier to his
factory. The passing of risk occurs at the frontier.
DES Delivered Ex Ship (named port)
Where goods are delivered ex ship, the passing of risk does not occur until the ship
has arrived at the named port of destination and the goods made available for
 unloading to the buyer. The seller pays the same freight and insurance c osts as he
would under a CIF arrangement. Unlike CFR and CIF terms, the seller has agreed to
bear not just cost, but also Risk and Title up to the arrival of the vessel at the named
port. Costs for unloading the goods and any duties, taxes, etc« are for th e Buyer. A
commonly used term in shipping bulk commodities, such as coal, grain, dry
chemicals - - - and where the seller either owns or has chartered, their own vessel.
DEQ Delivered Ex Quay (named port)
This is similar to DES, but the passing of risk d oes not occur until the goods have
been unloaded at the port of destination.
DDU Delivered Duty Unpaid (named destination place)
This term means that the seller delivers the goods to the buyer to the named place of
destination in the contract of sale. Th e goods are not cleared for import or unloaded
from any form of transport at the place of destination. The buyer is responsible for
the costs and risks for the unloading, duty and any subsequent delivery beyond the
place of destination. However, if the buy er wishes the seller to bear cost and risks
associated with the import clearance, duty, unloading and subsequent delivery
beyond the place of destination, then this all needs to be explicitly agreed upon in
the contract of sale.
DAP - Delivered At Place (named destination place)
This term means that the seller delivers when the goods are placed at the disposal of
the buyer on the arriving means of transport ready for unloading at the named place
of destination. This is exactly what the old Incoterm DDU stip ulated.
DDP Delivered Duty Paid (named destination place)
This term means that the seller pays for all transportation costs and bears all risk
until the goods have been delivered and pays the duty. Also used interchangeably
with the term "Free Domicile".The most comprehensive term for the buyer. In most of
the importing countries, taxes such as (but not limited to) VAT and excises should
not be considered prepaid being handled as a "refundable" tax. Therefore VAT and
excises usually are not representing a direct cost for the importer since they will be
recovered against the sales on the local (domestic) market.

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NOTE: The following information refers to Incoterms 2000 and is now replaced with
different information in In coterms 2010 [3]For a given term, 010 indicates that the 
has the responsibility to provide the service included in the price. 0 0 indicates it is the
2'3 responsibility. If insurance is not included in the term (for example, CFR) then
insurance for transport is the responsibility of the buyer or the seller depending on who
owns the cargo at time of transport. In the case of CFR terms, it would be the buyer while in
the case of CIF or CIP terms, it would be the seller .