INCO Terms Flashcards
EXW
(any form of transportation)
seller:
fulfills obligation when goods are delivered at agreed upon place by specified time
-risk of loss or damage is transferred
buyer:
must take possession of goods at agreed upon place
-assumes all risk of loss or damage
responsible for export and import clearance
most risk and responsibility to buyer
FCA
FREE CARRIER (any for of transportation) seller: must deliver goods to agreed upon location by specified date -transfers risk of loss or damage must obtain export clearance buyer: must take possession of goods at agreed upon location -assumes all risk of loss or damage responsible for import clearance responsible for international shipping
very common
corresponds to FOB
least exposure for seller (other than EXW)
FAS
FREE ALONGSIDE SHIP (water transportation only) seller: must place goods alongside vessel, nominated by the buyer, by specified date -transfers all risk of loss or damage responsible for export clearance buyer: must take possession of goods once alongside vessel -assumes all risk of loss or damage responsible for international shipping responsible for import clearance
uncommon b/c why not just FOB?
FOB
FREE ON BOARD (water transportation only) buyer: must place good on vessel, nominated by buyer, by specified date -transfers risk of loss or damage responsible for export clearance seller: assumes risk of loss or damage once goods are on board vessel responsible for international shipping responsible for import clearance
MUST be FOB: port of loading (NOT destination)
very common
CFR
COST AND FREIGHT (water transportation only) seller: must place goods on vessel at agreed upon place by specified date -risk of loss or damage transferred responsible for international shipping responsible for export clearance buyer: assumes risk of loss or damage once goods are on board vessel responsible for import clearance
only difference from FOB is seller pays int’l transport
CIF
COST INSURANCE FREIGHT
(water transportation only)
must place goods on vessel at agreed upon location by specified date
-risk of loss or damage transferred
responsible for international shipping AND insurance
responsible for export clearance
buyer:
assumes risk of loss or damage once goods are placed on vessel
responsible for import clearance
CPT
CARRIAGE PAID TO (any method of transportation) seller: must deliver goods to carrier by specified date -transfers risk of loss or damage responsible for international shipping responsible for export clearance buyer: assumes risk of loss or damage once goods are delivered to carrier at place of loading responsible for import clearance
corresponds to CFR
CIP
CARRIAGE INSURANCE PAID TO
(any method of transportation)
seller:
must place goods on agreed upon carrier by specified time
-transfers risk of loss or damage
responsible for int’l shipping AND insurance
responsible for export clearance
buyer:
assumes risk of loss or damage once goods are on board carrier at place of loading
responsible for import clearance
corresponds to CIF
DAT
DELIVERED AT TERMINAL (any method of transportation) seller: must deliver and unload goods at destination terminal or port -risk of loss or damage transfers responsible for export clearance buyer: must take possession of goods at destination port or terminal -assumes risk of loss or damage responsible for import clearance
DAP
DELIVERED AT PLACE (any method of transportation) seller: responsible for delivering goods at named place (beyond just the terminal) by specified time -risk of loss or damage transferred responsible for export clearance buyer: must take possession of goods at agreed upon place by specified time -assumes risk of loss or damage responsible for import clearance
strange because if buyer has an issue with obtaining import clearance, then seller cannot fulfill obligation
DDP
DELIVERED DUTY PAID
(any transportation method)
seller:
must deliver goods to agreed upon place of destination by specified time
responsible for import and export clearance
buyer:
must take possession of goods
least responsibility to buyer
possible negatives:
-lack of transparency
-expensive
INCOterms
defines obligations, costs, and risk of each party in a transaction
INCOterms do not:
specify when title passes
indicate the type of container
directly address issues of unloading charges
most common:
FOB & CIF
FCA & CIP
INCOterms are found in:
quotations, contract/purchase order, l/c, commercial invoice
