INCO Terms Flashcards
EXW
Any method of transportation
Seller must produce goods at agreed place and time
Not responsible for any export license or clearance requirements
Buyer must clear merch for export and import
MOST RISK AND RESPONSIBILITY FOR THE BUYER
INCO terms do not
determine where/when the merch passes between merchants
indicate the type of carriage
directly address issues of unloading costs
FCA
Free Carrier
Any method of transportation
seller obligated to deliver goods to agreed destination by a specified time
export clearance is responsibility of the seller
buyer assumes cost of international transport
import clearance is responsibility of the buyer
FAS
Free Alongside Ship
Water shipments only
seller must place goods alongside ship, nominated by buyer @ named port of shipment by specified date
export clearance is responsibility of the seller
buyer must arrange and pay for int’l shipping and take possession of goods once delivered
import clearance is responsibility of the buyer
FOB
Free On Board
Water shipments only
seller is responsible for placing goods on the vessel, nominated by the buyer @ agreed port by specified time
export clearance is responsibility of the seller
buyer must arrange and pay for int’l shipping
import clearance is responsibility of the buyer
FOB ____ must be port of LOADING
if damage occurs before the shipment (unclean b/l) then responsibility is on seller
CFR
Cost and Freight
Water shipments only
seller is responsible for placing goods on the vessel, nominated by the buyer @ agreed port by specified time
seller must arrange and pay for int’l shipping
export clearance is responsibility of the seller
buyer assumes risk and responsibility once merch is on board @ port of loading
import clearance is responsibility of the buyer
CIF
Cost Insurance Freight
Water shipments only
seller is responsible for placing goods on the vessel, nominated by the buyer @ agreed port by specified time
seller must arrange and pay for int’l shipping
seller must purchase insurance
export clearance is responsibility of the seller
buyer assumes risk and responsibility once merch is on board @ port of loading
import clearance is responsibility of the buyer
CIF & CFR vs. FOB
seller will build freight into the cost of the good and might profit, but might also have relations with transporters to get a lower cost than buyer could on their own
Who usually indicates INCO terms?
seller
CPT
Carriage Paid To
corresponds to CFR
any method of shipping
seller is responsible for placing goods on the vessel, nominated by the buyer @ agreed port/terminal by specified time
seller must arrange and pay for int’l shipping
export clearance is responsibility of the seller
buyer assumes risk and responsibility once merch is on board @ port of loading/terminal
import clearance is responsibility of the buyer
CIP
Carriage and Insurance Paid To
corresponds to CIF
any method of shipping
seller is responsible for placing goods on the vessel, nominated by the buyer @ agreed port/terminal by specified time
seller must arrange and pay for int’l shipping
seller must purchase insurance
export clearance is responsibility of the seller
buyer assumes risk and responsibility once merch is on board @ port of loading/terminal
import clearance is responsibility of the buyer
DAT
Delivered At Terminal
Any method of shipping
seller unloads goods and makes them available to the buyer @ agreed terminal or place of destination by specified date
seller must arrange and pay for int’l shipping
export clearance is responsibility of the seller
buyer assumes risk when goods are made available
import clearance is responsibility of the buyer
DAP
Delivered At Place
Any method of shipping
seller unloads goods and makes them available to the buyer @ agreed place of destination by specified date
seller must arrange and pay for int’l shipping
export clearance is responsibility of the seller
buyer assumes risk once goods are delivered
import clearance is responsibility of the buyer
**weird because if buyer does not obtain import clearance then seller cannot deliver the goods
DDP
Delivered Duty Paid
any method of transportation
seller makes goods available to the buyer @ agreed place of destination by specified date
seller must arrange and pay for int’l shipping
export AND import clearance is responsibility of the seller
buyer must take possession of goods
seller assumes almost al risk/responsibility, and buyer has almost no control and pays a premium
if seller is not transparent this method is problematic because you have no idea if your shipment is late/on time/early
Most commonly used INCO terms
FCA FOB CIF CIP DAT
