Incoterms (International Commercial Terms) is a requirement for delivery of goods or delivery conditions It is defined as a trade definition standard used to agree on a contract of sale between a buyer and a seller that is universal. To provide both buyers and sellers with the scope of their responsibilities, costs and risks by helping culturally-discriminatory parties understand each other.


The most common Incoterms have the following terms and conditions:


  • EXW – Ex Works (… the named place)

"Seller" prepares the goods for delivery to the buyer at the seller's place and then ends the delivery burden

The "buyer" will be responsible for the costs of transportation to the buyer's warehouse. Similar to buying products in front of the factory itself.


  • FCA  – Free Carrier (… the named point of departure)\

"Seller" will be responsible for the transportation of goods until the delivery of the goods to the carrier specified by the buyer to prepare for export

The burden of the "buyer", such as shipping costs, etc., begins immediately when the goods are on the vehicle in transit.


  • FAS  – Free Alongside Ship (… the named port of origin)

"Seller" will end the burden of delivering the goods when the seller has brought the goods to the specified port of origin.

Then it is the responsibility of the "buyer" to pay for the cost of bringing the goods onto the ship in the freight. The risks of bringing cargo on board and during transportation, including being responsible for the export formalities.

 

  • FOB – Free On Board (… the named port of origin)
    "Seller" will end the burden of delivering the goods when delivering the goods onto a cargo ship handle at the port of origin specified. The seller must also perform the export formalities.

The "buyer" is responsible for shipping costs and other costs, including the risk of transportation of goods, they are borne by the buyer immediately after the goods leave the specified port of origin.


  • CFR – Cost and Freight (… the named port of destination)

"Seller" will end the burden of delivering the goods when delivering goods onto a cargo ship and be responsible for the export formalities and paying the freight.The "buyer" will be responsible for all other costs and risks of transporting the goods immediately after the goods leave the specified port of origin.


  • CIF – Cost, Insurance & Freight (… the named port of destination)

"Seller" will end the burden of delivering the goods when delivering goods onto a cargo ship and must be responsible for the export formality and paying the freight and freight insurance. To protect the risk of transporting goods to the port of destination for the buyer as well


  • CPT – Carriage Paid To (… the named place of destination)

The "Seller" is liable for the transportation of goods until they are delivered to the carrier designated by the customer at the freight forwarder's location at the port of origin. The seller is in charge of completing export paperwork and paying freight.
Other expenses, including risks The transportation is the buyer's responsibility immediately after the goods are delivered to the consignee at the port of origin.


  • CIP – Carriage and Insurance Paid To (… the named place of destination)

"Seller" will be responsible for the cost until the destination that the transport company picks up. These burdens include transportation costs, product insurance costs. It will end when the goods are delivered to the shipping company.


  • DAT – Delivered At Terminal (…Delivered At Terminal)

The seller has completed the delivery of the goods. When loading and unloading products from a loaded vehicle to the buyer's selected location at the loading and unloading building in the port or at the given destination


  • DAP – Delivered At Place (… Delivered At Place)

The seller is responsible for any expenses. Exemption of taxes and import formalities and have to take risks until the product reaches its destination


  • DDP – Delivered Duty Paid (Door to Door) (… the named point of destination)

"Seller" will end the burden of delivery of the goods when prepare products for delivery at the buyer's destination. In which the seller is responsible for the cost of transporting goods, boarding a car, boarding a boat, loading a plane, insurance costs, customs fees, everything, without the buyer being responsible for anything, often found in famous marketplaces like Amazon.



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