INCOTERMS 2020 (CONCEPT) Flashcards
refers to freight cost, by air or sea, charged by the carrier (airlines/shipping lines) or amount paid by the shipper to carrier for the transport of goods from country of origin to country of destination. (Grp. “C” & “D”)
MAIN CARRIAGE
refers to the cost of transport for hauling goods from seller’s premises to a designated point at country of origin. Also known as “Origin Inland Freight”. (Grp. “F”, “C” & “D”)
PRE-CARRIAGE
refers to the cost of transport for hauling goods from the port of discharge to buyer’s warehouse or designated place at destination. Also known as “Destination Inland freight”. (Grp. “D” only)
ON-CARRIAGE
means the main carriage for the exported goods was paid by seller prior to departure from country of origin and therefore included in seller’s invoice price. (Grp. “E”, “C” & “D” only)
FREIGHT PRE-PAID
means the main carriage was paid by the buyer upon arrival of imported goods at country of destination and not included in seller’s invoice price. (Grp. “E” & “F”)
FREIGHT COLLECT
refers to inter-continental transit of goods involving main carriage that can be carried out both by air or by sea. (EXW, FCA, CPT, CIP, DPU, DAP & DDP)
MULTIMODAL TRANSPORT
generic name for cargo insurance. It refers to the insurance premium paid in the international transport of goods by air/sea. This is procured by the buyer or seller to cover risks against loss or damage to the cargo during pendency of the voyage from country of origin to destination. (CIF & CIP only)
PORT TO PORT INSURANCE
Insurance coverage taken up by seller to cover risks against loss or damage to the goods while in transit from his premises to a delivery point at origin. (Grp. “F”, “C” & “D”)
INTERNAL INSURANCE
refers to cost of handling and moving loose or breakbulk cargoes within a seaport at country of origin or destination. (ORIGIN – Grp “F”, “C”, & “D”) (DESTINATION – Grp “D”)
ORIGIN/DESTINATION LCL CHARGES
refers to cost of handling and moving containerized cargoes within the terminal facilities of a seaport at country of origin or destination. (ORIGIN – Grp “F”, “C”, & “D”) (DESTINATION – Grp “D”)
ORIGIN/DESTINATION TERMINAL HANDLING CHARGES (THC)
refers to incidental expenses (except main carriage and port to port insurance) incurred by the seller/exporter in relation to fulfilling his contractual obligation to deliver the goods for each of the 11 incoterms. (e. g. pre-carriage/on-carriage, export documentation/clearance fees, forwarder’s fees, THC/LCL charges, export/import duties & taxes, etc.) (Grp. “F”, “C” & “D”)
OTHER CHARGES (O/C)
refers to airlines, shipping lines or their agents (NVOCC/IFF)
CARRIER
refers to bringing of goods to a specific place or to a carrier/forwarder at country of origin or destination and used as reference point when liability against risk for loss of or damage to the goods passes on from seller to buyer
DELIVERY
I. CATEGORY E (DEPARTURE)
what is EXW
(Ex Works)…named place of delivery
II. CATEGORY F (SHIPMENT)
what is FCA
(Free Carrier)…named place of delivery
II. CATEGORY F (SHIPMENT)
what is FAS
(Free Alongside Ship)…named port of shipment
II. CATEGORY F (SHIPMENT)
what is FOB
(Free on Board)…named port of shipment
III. CATEGORY C(SHIPMENT)
what is CFR
III. CATEGORY C(SHIPMENT)
what is
CIF (Cost, Insurance & Freight)…named port of destination
III. CATEGORY C(SHIPMENT)
what is CPT
(Carriage Paid to)…named destination
III. CATEGORY C(SHIPMENT)
what is CIP
(Carriage & Insurance Paid to)…named destination
IV. CATEGORY D (ARRIVAL)
what is DPU
(Delivered at Place Unloaded)…named place of destination
IV. CATEGORY D (ARRIVAL)
what is DAP
(Delivered at Place)…named place of destinationv
IV. CATEGORY D (ARRIVAL)
what is DDP
Delivered Duty Paid)…named place of destination
ARRIVAL, MAIN CARRIAGE (FRT PRE – PAID) PAID BY SELLER PRIOR TO DEPARTURE AT ORIGIN
AND INCLUDED IN INVOICE PRICE EXCEPT PORT TO PORT INSURANCE.
COMMONALITY
___________ means that the seller’s delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (e.i. works, factory, warehouse, etc.)
“Ex Works”
_______________________ means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The risks passes on to the buyer at the delivery point.
FCA requires the seller to clear the goods for export but has no obligation to contract for carriage nor to clear the goods for import, pay any import duty or carry out any import customs formalities.
“Free Carrier”
_______________ means that the seller deliver the goods to the carrier or another person nominated by the seller at an agreed place and that the seller must contract for and pay the costs of main carriage necessary to bring the goods to the named place of destination.
“Carriage Paid To”
__________means that the seller delivers the goods to the carrier or another person nominated by the seller
at an agreed place and that the seller must contract for and pay the costs for carriage necessary to bring the goods to the
named place of destination.
The seller also contracts for insurance cover against the buyer’s risk of loss or damage to the goods during the carriage. Seller
is required to obtain insurance only on minimum cover.
“Carriage Insurance Paid To”
_______________means that the seller delivers when the goods are placed alongside the vessel (e. g., on a quay/dock or a barge/lighter) nominated by the buyer at the named port of shipment.
The risk of loss or damage to the goods passes to the buyer when the goods are alongside the ship and he bears all costs from that moment onwards.
“Free Alongside Ship”
____________ means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage to the goods passes on to the buyer when goods are on board the vessel, and the buyer bears all costs from that moment onwards.
“Free on Board”
________________ means that the seller delivers the goods on board the vessel nominated by him. The risk of loss of or damage to the goods passes on to the buyer when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
“Cost and Freight”
_______________ means that the seller delivers the goods on board the vessel. The risk of loss or damage to the
goods passes on to the buyer when goods are on board the vessel. The seller must contract and pay the costs and freight necessary to bring the goods to the named port of destination.
The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
Seller is required to obtain insurance only on minimum cover.
“Cost, Insurance and Freight”
___________________ means that the seller delivers when the goods, are unloaded from the arriving means of
transport at buyer’s warehouse or designated place, and placed at the disposal of the buyer.
The seller bears all risks involved in bringing the goods to and unloading them at the named place of destination.
“Delivered at Place Unloaded”
______________means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination (beyond the terminal). The seller bear all risks involved in bringing the goods to the named place.
“Delivered at Place”
______________ means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared not only for export but also for import on arriving means of transport ready for unloading at the named place of destination.
Seller has to pay any duty for both export and import and to carry out all customs formalities at origin and at destination. Any VAT or any taxes payable upon import are for the seller’s account unless expressly agreed otherwise in the sales contract.
“Delivered Duty Paid”
