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.
COST AND FREIGHT - CFR (…named port of destination)
"Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port.
"Cost and Freight"" means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. The CFR term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. Same as C&F. "
COST, INSURRANCE, FREIGHT- CIF (…named port of destination)
"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.
""Cost, Insurance and Freight"" means that the seller has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIF term the seller is only required to obtain insurance on minimum coverage. The CIF term requires the seller to clear the goods of export. This term can only be used for sea and inland waterway transport. "
DELIVERED DUTY PAID - DDP (...named place of destination)
"Delivered duty paid" means that the seller fulfils his obligation to deliver when the goods have been made available to the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods, cleared for importation. The EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation. This term should not be used if the seller is unable directly or indirectly to obtain the import license. If the parties wish the buyer to clear the good for importation and to pay the duty, the term DDU should be used. This term may be used irrespective of the mode of transport.
DELIVERED DUTY UNPAID - DDU (...named place of destination)
"Delivered duty unpaid" means that the seller fulfils his obligation to deliver when the goods have been made available to the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks customs formalities. The buyer has to pay any additional costs and to bear any risks caused by his failure to clear the goods for import in time. If the parties wish the seller to carry out customs formalities and bear the costs and risks resulting there from, this has to be made clear by adding words to this effect. This term reflects as " Door-to-Door" intermodal and may be used irrespective of the mode of transport.
EX WORKS - EXW (..named place)
"Title and risk pass to buyer including payment of all transportation cost from the seller's door.
""Ex works"" means that the seller fulfils his obligation to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc.) Only documents specified in contract must be supplied to the buyer. In particular, he is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all cost and risks involved in taking the goods from the seller's premises to the desired destination. This term thus represents the minimum obligation for the seller. Used for any mode of transportation. "
FREE ALONG SIDESHIP - FAS (...named port of shipment)
"Free Alongside Ship"" means that the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the buyer to clear the goods for export. It should not be used when the buyer cannot carry out directly or indirectly the export formalities.
This term can only be used for sea or inland waterway transport."
FREE CARRIER - FCA (…named place)
"Title and risk pass to buyer including transportation 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.
""Free Carrier"" means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may chose within the place or range stipulated where the carrier shall take the goods into his charge. This term may only be used for any mode of transport , including multimodal transport."
FREE ON BOARD - FOB (…named port of shipment)
"Free on Board"" means that the seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport. "
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INFORMATION
INCO TERMS
