There are 11 different Incoterms which detail where ultimate responsibility lies for the transport, insurance, duties and clearance of goods. ________________________________________Incoterm Meaning EXW or Ex-works The seller makes the goods available to the buyer at the seller's own premises. The buyer arranges transportation and insurance, carries out all export formalities, pays customs charges at import and bears all risks. FCA or "Free Carrier" Suitable for all modes of transport. The seller carries out all export formalities and delivers the goods to the carrier, or the other person nominated by the buyer, where risks are transferred to the buyer. FAS or "Free Alongside Ship" The seller carries out all export formalities and delivers the goods alongside the ship at the named port of shipment. From this point all responsibility and risk transfer to the buyer. FOB or "Free On Board" As FAS, but the seller's responsibilities end once the goods are safely on board the ship. CFR or "Cost and Freight" The seller pays the costs to bring the goods to the named port of destination but the buyer is responsible for the risk once the goods have been loaded at the port of shipment. CIF or "Cost, Insurance and Freight" As CFR, but the seller must obtain insurance for the benefit of the buyer. CPT or "Freight/Carriage Paid To" The seller is responsible for the goods until they are delivered to the named place of destination. The term is used where there are several modes of transport involved. CIP or "Freight/Carriage and Insurance Paid To" As CPT, but the seller is also responsible for obtaining insurance for the benefit of the buyer to cover the carriage of goods. DAP or "Delivered At Place" The seller has delivered the goods only when they are placed at the disposal of the buyer and are ready for unloading at the named place of destination. Parties are advised to specify as clearly as possible the point within the agreed place of destination, because risk transfers at this point from the seller to the buyer.
DAT or "Delivered At Terminal" The seller has delivered the goods. Once they are unloaded and are placed at the disposal of the buyer at a named terminal at the named port or place of destination. "Terminal" includes quays, warehouses, container yard or road, rail or air terminal. DDP or "Delivery/Duty Paid" The seller bears the maximum responsibility for the goods, carrying out all export formalities, paying for transportation, clearing the goods for import and paying all duties and taxes.
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