Unitrans Worldwide - Useful Tools & Info

Incoterms 2000 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.

ICC was founded in 1919 and Incoterms were originally developed in 1936. Today the ICC groups thousands of member companies and associations from over 130 countries. National committees in the world's major capitals coordinate with their membership to address the concerns of the business community and to convey to their governments the business views formulated by ICC.

Effective January 1 of 2000, the ICC once again updated Incoterms to follow the modern trends in international trade. They should now be incorporated under the reference "Incoterms 2000" into contracts that are effective from January 2000 or any date thereafter.

Provided that the Incoterms themselves are correctly used, the risk of costly misunderstandings and legal disputes is greatly reduced.

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).

The latest edition takes account of the increased use of intermodal transport by providing for the delivery of goods from seller to buyer at any point in the transport chain instead of concentrating as in the past on the moment the goods cross the ship's rail. The term FCA (Free Carrier) gives a clear definition of the seller's delivery obligation in the country of export, irrespective of the mode of transport.

INCOTERMS 2000 AT A GLANCE:

GROUP 'E'
Under group " E " the seller delivers when he or she places the goods at the disposal of the buyer at the seller's premises or another named place such as factory, warehouse etc...If your cargo required special type of loading and handling such as crane or heavy equipment rental, bracing and blocking or special support such as air bags to prevent damage during transportation, the seller can require the buyer to pay for the additional costs.

EXW - Ex Works

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.

GROUP 'F'
Under Group " F " the seller is required to delivered the goods for carriage as instructed by the buyer. All export clearance charges are for the account of the seller.

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.

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.

FOB - Free On Board

and 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.

GROUP 'C'
Under the "C" group, the seller is required to contract for carriage on usual terms at his own expense. Therefor, a point up to which he would have to pay transport costs must necessarily be indicated. Seller is also responsible for export customs clearance formalities.

CFR - Cost and Freight

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

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.

CIP - Carriage and Insurance Paid To

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.

CPT - Carriage Paid To

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.

GROUP 'D'
Under the "D" group, the seller is responsible for the arrival of the goods at the agreed place or point of destination at the border or within the country of import. The seller must bear all risks and costs in bringing the goods thereto.

DAF - Delivered at 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.

DDP - Delivered Duty Paid

Title and risk pass to buyer when seller delivers goods to named destination point cleared for import. Used for any mode of transportation.

DDU - Delivered Duty Unpaid

Title, risk and responsibility of import clearance pass to buyer when seller delivers goods to named destination point. Used for any mode of transportation. Buyer is obligated for import clearance.

DDU - Delivered Duty Unpaid

Seller fulfills his obligation when goods have been made available at the named place in the country of importation

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 (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.

Note: EXW, CPT, CIP, DAF, DDU and DDP are commonly used for any mode of transportation. FAS, FOB, CFR, CIF, DES, and DEQ are used for sea and inland waterway.