INCOTERMS 2020 (CONCEPT)

Question 1

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”)

Answer 1

MAIN CARRIAGE

Question 2

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”)

Answer 2

PRE-CARRIAGE

Question 3

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)

Answer 3

ON-CARRIAGE

Question 4

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)

Answer 4

FREIGHT PRE-PAID

Question 5

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”)

Answer 5

FREIGHT COLLECT

Question 6

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)

Answer 6

MULTIMODAL TRANSPORT

Question 7

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)

Answer 7

PORT TO PORT INSURANCE

Question 8

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”)

Answer 8

INTERNAL INSURANCE

Question 9

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”)

Answer 9

ORIGIN/DESTINATION LCL CHARGES

Question 10

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”)

Answer 10

ORIGIN/DESTINATION TERMINAL HANDLING CHARGES (THC)

Question 11

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”)

Answer 11

OTHER CHARGES (O/C)

Question 12

refers to airlines, shipping lines or their agents (NVOCC/IFF)

Answer 12

CARRIER

Question 13

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

Answer 13

DELIVERY

Question 14

I. CATEGORY E (DEPARTURE)
what is EXW

Answer 14

(Ex Works)…named place of delivery

Question 15

II. CATEGORY F (SHIPMENT)
what is FCA

Answer 15

(Free Carrier)…named place of delivery

Question 16

II. CATEGORY F (SHIPMENT)
what is FAS

Answer 16

(Free Alongside Ship)…named port of shipment

Question 17

II. CATEGORY F (SHIPMENT)
what is FOB

Answer 17

(Free on Board)…named port of shipment

Question 18

III. CATEGORY C(SHIPMENT)
what is CFR

Question 19

III. CATEGORY C(SHIPMENT)

what is

Answer 19

CIF (Cost, Insurance & Freight)…named port of destination

Question 20

III. CATEGORY C(SHIPMENT)

what is CPT

Answer 20

(Carriage Paid to)…named destination

Question 21

III. CATEGORY C(SHIPMENT)

what is CIP

Answer 21

(Carriage & Insurance Paid to)…named destination

Question 22

IV. CATEGORY D (ARRIVAL)

what is DPU

Answer 22

(Delivered at Place Unloaded)…named place of destination

Question 23

IV. CATEGORY D (ARRIVAL)

what is DAP

Answer 23

(Delivered at Place)…named place of destinationv

Question 24

IV. CATEGORY D (ARRIVAL)

what is DDP

Answer 24

Delivered Duty Paid)…named place of destination

Question 25

ARRIVAL, MAIN CARRIAGE (FRT PRE – PAID) PAID BY SELLER PRIOR TO DEPARTURE AT ORIGIN AND INCLUDED IN INVOICE PRICE EXCEPT PORT TO PORT INSURANCE.

Answer 25

COMMONALITY

Question 26

___________ 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.)

Answer 26

“Ex Works”

Question 27

_______________________ 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.

Answer 27

“Free Carrier”

Question 28

_______________ 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.

Answer 28

“Carriage Paid To”

Question 29

__________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.

Answer 29

“Carriage Insurance Paid To”

Question 30

_______________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.

Answer 30

“Free Alongside Ship”

Question 31

____________ 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.

Answer 31

“Free on Board”

Question 32

________________ 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.

Answer 32

“Cost and Freight”

Question 33

_______________ 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.

Answer 33

“Cost, Insurance and Freight”

Question 34

___________________ 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.

Answer 34

“Delivered at Place Unloaded”

Question 35

______________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.

Answer 35

“Delivered at Place”

Question 36

______________ 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.

Answer 36

“Delivered Duty Paid”