International Commercial (INCO) Terms

Incoterms are internationally recognized terms of sale used to determine responsibility for shipping arrangements and transfer of goods shipped in international trade. These standard terms help eliminate or reduce legal disputes and misinterpretation of responsibilities to the export transaction. There are four term categories:

E Terms. The seller makes the goods available at the seller’s facility.

F Terms. The seller is required to deliver the goods to a carrier specified by the buyer.

C Terms. The seller contracts for carriage, but does not assume the risk of loss or damage to the goods after delivery to the carrier.

D Terms. The seller is responsible for all costs and risks required to bring the shipment to the destination country.

INCOTERMS 1990: RESPONSIBILITIES TO THE EXPORT TRANSACTION

Ex-Works

Seller. Goods made available at seller’s premises.

Buyer. Inland transportation to port of exit, ocean carriage, applicable documentation and forwarding fees, marine insurance, and inland transit at destination.

Free Carrier

Seller. Inland transit to the exporting carrier or freight forwarder.

Buyer. Inland move to port of exit, ocean carriage, forwarding and documentation fees, insurance, and overland move at destination.

Free Alongside Ship

Seller. Inland move to the port of exit.

Buyer. Ocean carriage, forwarding and documentation, insurance, and overland move at destination.

Free on Board

Seller. Inland move to port of export, loading of cargo on vessel, and applicable forwarding/documentation fees.

Buyer. Ocean carriage, insurance, and overland move at destination.

Cost and Freight

Seller: Inland move to the pier, ocean carriage, and forwarding/documentation fees.

Buyer: Marine insurance and overland move at destination.

Cost Insurance, and Freight

Seller: Inland move to the pier, ocean carriage, forwarding/documentation fees and marine insurance.

Buyer: Overland move at destination.

Carriage Paid To

Seller. Inland move to the pier, ocean carriage, forwarding/documentation fees, and inland move from port to consignee.

Buyer. Marine insurance.

Carriage Insurance Paid To

Seller. Inland move to the pier, ocean carriage, forwarding/documentation fees, marine insurance, and inland move from port to consignee.

Buyer: Possible inland move to facility.

Delivered at Frontier

Seller. All aspects of move, but before the custom border of the adjoining control.

Buyer: Customs clearance and inland move to facility.

Delivered Ex Ship

Seller. All aspects of move to vessel arrival in port of discharge.

Buyer. Unloading, customs clearance, and delivery.

Delivered Ex Quay

Seller. All aspects of move to discharge of cargo on the wharf.

Buyer. Customs clearance and delivery to facility.

Delivered Duty Unpaid

Seller. All physical aspects of the move.

Buyer. Customs clearance (duties, taxes, and other official charges).

Delivered Duty Paid

Seller. All physical aspects of the move, including customs clearance. Buyer. No responsibility to make shipment or customs clearance arrangements.