Incoterms 2010 explained*
Incoterms are three letter trade terms used in contracts for the sale of goods. These terms describe the tasks, costs and risks involved in the movement of goods from seller to buyer.
It is important that these terms are made clear in your contract to avoid confusion.
As there have been several versions of the incoterms issued over the years , it would be advisable to indicate as below;
Term/named place/incoterms version. For example : FOB Hong Kong Incoterms 2010
Incoterms 2010 Groups
There are 11 incoterms 2010 rules, broken down into two groups indicated below with a brief explanation.
For a more detailed explanation , of cost and transfer of risk please feel free to contact us via the contact page.
Rules for Sea and Inland Waterway Transport
FAS (FREE ALONGSIDE SHIP)
The seller will deliver the goods customs cleared(for export), alongside the vessel, nominated by the buyer at the named port of shipment. The buyer bears all costs from this point onwards
FOB (FREE ON BOARD)
The seller will deliver the goods customs cleared(for export), on board the vessel, nominated by the buyer at the named port of shipment. The buyer bears all costs from this point onwards
CFR (COST & FREIGHT)
The seller will deliver the goods customs cleared(for export) through to the named port of destination. The buyer bears all costs from this point onwards
CIF (COST INSURANCE & FREIGHT)
The seller will deliver the goods customs cleared ( for export) through to the named port of Destination. The seller will also insure cover against the buyers risk of loss or damage to the goods during transit. (only minimum cover is required) The buyer bears all costs from this point onwards.
Rules for any mode of transport
EXW (EX WORKS)
The seller makes the goods available for collection (factory/warehouse). The buyer is responsible for all costs from collection point onwards.
FCA (FREE CARRIER)
The seller delivers the goods to the carrier or another person nominated by the buyer. The buyer is responsible for all cost from this point onwards.
CPT (CARRIAGE PAID TO)
The seller delivers the goods customs cleared (for export) to the carrier or another named person nominated by the seller, and the seller must contract and pay the costs of carriage to the named place of Destination. The buyer is responsible for clearing the goods for import.
CIP (CARRIAGE & INSURANCE PAID TO)
The seller delivers the goods customs cleared to the carrier or another named person nominated by the seller, and the seller must contract and pay the costs of carriage to the named place of Destination. The seller will also insure cover against the buyers risk of loss or damage to the goods during transit (only minimum cover is required) The buyer is responsible for clearing the goods for import
DAT (DELIVERED AT TERMINAL)
The seller delivers the goods customs cleared (for export), at the disposal of the buyer at a named terminal , at the named port or place of destination
DAP (DELIVERED AT PLACE)
The seller delivers the goods customs cleared ( for export), at the disposal of the buyer at the named place of destination. The seller is not responsible to clear the goods for import.
DDP (DELIVERED DUTY PAID)
The seller delivers the goods customs cleared ( for export) ready for unloading at the named place of destination. The seller bears all costs involved excluding VAT
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Tim UK (Binoray) Ltd offer a full range of FCL services. Import and Export worldwide. For More Information with regards FCL Movements / rates, or just a general chat, please feel free to contact us via the enquiry or Quote sections of our website –direct link: http://www.freightforwardersuk.com/get-a-quote or call us on +44 (0) 207 6143513
* Please be aware that information provided by this blog is subject to change. We recommend that you do not take any information held within as a definitive guide to the law or the relevant matter being discussed. You are advised to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
