Incoterms

Question 1

List the 11 Incoterms in order of least obligation to the seller, to highest obligation to seller

Answer 1

1) EXW - Ex works
2) FCA - Free carrier
3) FAS - Free alongside ship
4) FOB - Free on board
5) CFR - Cost and freight
6) CIF - Cost insurance freight
7) CPT - Carriage paid to
8) CIP - Carriage insurance paid
9) DAT - Delivered at terminal
10) DAP - Delivered at place
11) DDP - Delivery duty paid

Question 2

EXW

Answer 2

1) EXW - Ex works

• ex works (named place of delivery)
• goods @ buyers risk from moment seller sends a notice of readiness to the buyer
• obtaining import/export licenses + customs admin = sellers responsibility

Question 3

FCA

Answer 3

2) FCA - Free carrier

• free carrier (named place of delivery)
• seller arranges pre-carriage to named place (transport hub etc)
• buyer arranges main carriage
• risk transfers when vehicle arrives at named place (before unloading)
• seller still responsible for export clearance

Question 4

FAS

Answer 4

3) FAS - Free alongside ship

• free alongside ship (named port of shipment)
• seller delivers to quayside, risk transfers then
• seller responsible for export + customs requirements

Question 5

FOB

Answer 5

4) FOB - Free on board

• free on board (named port of shipment)
• same delivery as FAS but risk only transfers once loaded on ship
• seller responsible for export + customs requirements

Question 6

CFR

Answer 6

5) CFR - Cost and freight

• cost and freight (named port of destination)
• seller arranges and pays for transport to destination port BUT not insurance
• risk transfers once goods loaded on board
• seller responsible for export + customs requirements

Question 7

CIF

Answer 7

6) CIF - Cost, insurance and freight

• cost, insurance and freight (named port of destination)
• seller arranges and pays for transport and insurance to destination port
• risk transfers once goods loaded on board
• seller responsible for export + customs requirements

Question 8

CPT

Answer 8

7) CPT - Carriage paid to

• carriage paid to (named place of destination) NB vs named port with CFR
• seller arranges and pays for transport to place of destination BUT not insurance
• risk transfers once goods loaded on board
• seller responsible for export + customs requirements
• buyer responsible for import license + customs requirements

Question 9

CIP

Answer 9

8) CIP - Carriage and insurance paid

• carriage and insurance paid to (named place of destination) NB vs named port with CFR
• seller arranges and pays for transport + insurance to place of destination
• risk transfers once goods loaded on board
• seller responsible for export + customs requirements
• buyer responsible for import license + customs requirements

Question 10

DAT

Answer 10

9) DAT - Delivered at terminal

• delivery at terminal (named terminal at port or place of destination)
• seller arranges and pays for transport and insurance to destination port
• risk transfers once goods placed at specified place of destination
• seller responsible for export + customs requirements

Question 11

DAP

Answer 11

10) DAP - Delivered at place

• delivered at place (named place of destination)
• seller arranges and pays for transport and insurance to named place of destination
• risk transfers once goods placed at place of delivery
• seller responsible for export + customs requirements

Question 12

DDP

Answer 12

11) DDP - Delivered duty paid

• delivered duty paid (named place of destination)
• deliver goods not unloaded to named place of destination
• seller bears costs and risks to that place
• seller responsible for export and customs requirements + import requirements and payments