EXW – Ex Works (named place)
The meaning of it is that the recipient takes the goods from the premises of the supplier, it can be a store, warehouse, etc. The supplier does not bear any obligations, except for the shipment of goods. All costs are borne by the recipient. EXW is not intended for the transport of goods to the EU.
EXW is not used if the recipient is not able to export independently. EXW is for domestic traffic. EXW condition is used to transport goods by any means of transport.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
FCA - Free Carrier (named place of origin)
The most common term (almost 40% of international treaties are drawn up with this rule), because it is universal and easy to use. The best benefits are the use of any type of transport and any place of delivery of goods that is located in the seller’s country. There are 2 points of dispatch:
1. A point of dispatch of goods that belongs to the seller - this can be his warehouse, store, etc. Delivery is considered completed if the goods are loaded on the buyer's vehicle or transferred to the courier specified by the buyer.
2. A point that does not belong to the seller - it can be a seaport, airport, etc. Delivery is considered completed when the goods have been transferred to the carrier from the seller’s vehicle. Unloading goods from the seller’s vehicle is not the responsibility of the carrier.
If the buyer instructed to give the seller a package of documents (for example, a bill of lading marked “on board” or an air waybill) then the carrier must provide all original consignment notes to the seller.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
FAS – Free Alongside Ship
The meaning of it is that the delivery is completed for the supplier when the product is on the quay for loading on vessel hired by the recipient. FAS is intended only for transporting goods by sea or inland waterway. Supplier pays the export duty, packaging of goods and transportation of cargo to the port, as well as the possible costs of arrival at the port, and provides the relevant documentation. Recipient loads the goods onto the ship, hires and pays the ship, bears all the costs of transporting the goods to the destination, insures the goods, pays import duty, relevant certificates, licenses, etc. FAS is designed to transport goods in bulk or in containers, and also for transportation of heavy equipment.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
FOB - Free On Board (named port of loading)
The meaning of it is that the delivery is completed for the supplier when the product is on board the ship hired by the recipient. FOB is intended only for transporting goods by sea or inland waterway. The responsibilities of the supplier and the recipient are shared equally. Supplier pays export duty, packaging the goods and transportation of the cargo to the port, loads the goods on board and provides the relevant documentation. Recipient hires and pays the ship, insures the goods, pays import duty, relevant certificates, licenses, etc. FOB is designed to transport goods in bulk or in containers, and also for transportation of heavy equipment.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
CFR/C&F - Cost and Freight (named port of destination)
The meaning of it is that the delivery is completed for the supplier when the product is on board the ship hired by the supplier to a port of destination. CFR is intended only for transporting goods by sea or inland waterway. Supplier pays export duty, packaging the goods and transportation of the cargo to the port, loads the goods on board, hires and pays the ship and provides the relevant documentation. Recipient unloads the vessel, delivers the goods to the destination, insures the goods, pays import duty, relevant certificates, licenses, etc. CFR is designed to transport goods in bulk or in containers, and also for transportation of heavy equipment.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
CIF - Cost, Insurance and Freight (named port of destination)
The meaning of it is that the delivery is completed for the supplier when the product came on board the vessel, products have been insured by the supplier, and the vessel was hired by him to transport the goods to the destination port, which is established in the agreement. CIF is intended only for transporting goods by sea or inland waterway. Supplier pays export duty, packaging the goods and transportation of the cargo to the port, loads the goods on board, hires and pays the ship, insures the goods and provides the relevant documentation. Recipient unloads the vessel, pays import duty, relevant certificates, licenses, etc., delivers the goods to the point set in the agreement. CIF is designed to transport goods in bulk or in containers, and also for transportation of heavy equipment.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
CIP - Carriage and Insurance Paid Тo (named place of destination)
The meaning of it is that the delivery is completed for the supplier when customs procedures for export were completed, paid insurance policy and the goods were transferred to the forwarder for transportation to a specific destination provided for in the agreement. Sum insured must be 110% of the value of the agreement and in the currency of the international agreement. All risks associated with the transportation of goods pass from supplier to recipient after delivery of the goods to the forwarder. CIP is concluded on the basis of an international contract of sale, which indicates all the responsibilities and what expenses each party bears. As a rule, the supplier bears all responsibilities with the delivery, insurance policy and clearance of goods to a specific destination.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
DAP — Delivered at Place
The meaning of it is that the delivery is completed for the supplier when the goods are delivered to the recipient and ready for unloading at the indicated destination. Supplier must pay all export duties and costs for the delivery of the goods to the specified destination, its unloading. Supplier pays export duty, packaging the goods and transportation of the cargo to the port, loads the goods on board, hires and pays the ship, provides the relevant documentation, and also pays for unloading from the ship and delivery to the final destination. Recipient unloads a vehicle on spot, insures the goods at will, pays import duty, relevant certificates, licenses, etc. DAP is used to transport goods by any means of transport.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
DPU — Delivered Named Place Unloaded
The meaning of it is that the delivery is completed for the supplier when the goods are placed at the disposal of the recipient at the indicated place. Supplier must bear all costs for export duties and delivery of goods to the specified destination, including its unloading. Supplier pays for export duty, packaging the goods and transportation of the cargo to the port, loads the products on board, hires and pays the ship, engages in unloading from a ship, and optionally delivers and unloads at the destination. Recipient insures the goods at will, pays import duty, relevant certificates, licenses, etc. DPU is used to transport goods by any means of transport.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
DDP — Delivered Duty Paid
The meaning of it is that the delivery is completed for the supplier when the goods are delivered to the recipient, import duty paid and cargo ready for unloading at the indicated destination. DDP clause implies maximum obligations for the shipper, as opposed to EXW clause, where all shipping responsibilities are placed on the recipient. Recipient assumes only the unloading of goods on the spot and insurance of the goods at will. All other costs are transferred to the supplier (export and import payments, costs of transportation of goods) DDP is used to transport goods by any means of transport.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
CNI – (Cost and Insurance)
The term means that delivery is completed for the supplier, if the goods are insured, placed at the indicated port of shipment This term is included in category “C” and means that all duties for the safety of the goods are transferred at the point of departure from the supplier to the recipient. Also, this concept will allow the supplier-exporter to be responsible for the international insurance coverage of the goods. CNI contract terms include the cost of international insurance coverage at the expense of the supplier, and does not include freight (difference between CNI and CRF/CIF). The term is intended to eliminate all inaccuracies between the terms FCA and CFR / CIF.
Who pays:
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.