English for business studies
All about Incoterms
Die Incoterms, die erstmals 1936 von der Internationalen Handelskammer aufgestellt wurden, schaffen eine gemeinsame Basis für den internationalen Handel. Secretary Today verschafft Ihnen einen Überblick über diese wichtigen Handelsbestimmungen.
When two businesses enter into acontract to buy and sell goods, they are free to negotiate the terms of this contract.
These terms include the price, quantity and characteristics of the goods. They also cover the details of who is responsible for loading and unloading the goods, who bears the riskof loss during shipment and who pays for which part of the transportation process.
This second part of the contract – transportation and insurance – is regulated by Incoterms (International Commercial Terms). Incoterms are devised and published by the International Chamber o Commerce in Paris and endorsed by the United Nations International Commission on International Trade Law. They are adhered to by the major trading nations of the world.
Currently, there are 13 Incoterms in use, Incoterms 2000. This table explains what they all mean and will help you talk about the terms of trade and shipment with your customers.
| Incoterm | Meaning / applicable form of transport | Explanation |
| EXW | Ex Works¹ | Seller has goods ready for collection at his premises on date agreed in contract. Buyer responsible for goods from this point. |
| FCA | Free Carrier¹ | Seller clears goods for export and delivers them to carrier and is responsible for insurance up to this point. Buyer owns goods when they arrive at carrier. |
| FAS | Free Alongside Ship² | Seller clears goods for export, delivers alongside ship and pays for insurance up to this point. Buyer is responsible for loading goods on board ship. |
| FOB | Free On Board² | Seller clears goods for export and delivers them on board ship and pays insurance up to this point. Buyer is responsible for goods once they are on board. |
| CFR | Cost And Freight² | Seller pays for insurance to port of departure and for transportation to port of destination. Buyer responsible for goods when on board. |
| CIF | Cost, Insurance and Freight² | Same as CFR, but seller also pays for insurance to port of destination. |
| CPT | Carriage Paid To¹ | Seller delivers goods to carrier and pays for transportation to destination. Buyer owns goods when they are delivered to carrier. |
| CIP | Carriage and Insurance Paid To¹ | Same as CPT, seller also arranges insurance against loss or damage to goods during carriage. |
| DAF | Delivered At Frontier¹ | Seller responsible for delivering goods to a named point on border of next country. Buyer pays any customs duty and is responsible for goods when they arrive at border. |
| DES | Delivered Ex Ship² | Seller delivers goods to port of destination. Buyer owns goods when ship is at port of destination. |
| DEQ | Delivered Ex Quay² | Seller delivers goods to destination port and pays any customs duty. Buyer owns goods when they are cleared for import and on quay. |
| DDU | Delivered Duty Unpaid¹ | Seller transports goods to their destination. Buyer pays any customs duty. Buyer owns goods when they arrive at destination. |
| DDP | Delivered Duty Paid¹ | Seller delivers goods to destination and pays any customs duty. Buyer owns goods when they arrive at destination. |
¹all ²sea and inland waterway
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