Your shopping cart is empty!
Incoterms (International Commercial Terms) These are maritime and commercial terms covering issues such as the control of goods and financial liabilities, such as the payment of cargo and freight insurance and published by the International Chamber of Commerce (ICC).
There are eleven Incoterms that fall into two main categories organized by the modes of transport.
Group 1. Incoterms that apply to any mode of transport are:
Group 2. Incoterms that apply to sea and inland waterway transport only:
Below is some information about commonly used incoterms:
Term | Definition | Risk | Cost | Include on the Quotation |
EXW - Ex Works | Buyer arranges for pick-up of goods at the seller's location - Seller is responsible for packing, labeling, and preparing the goods for shipment on a specified date or time frame | Bayer assumes all risk | Buyer pays all transportation costs | N/A |
FCA - Free Carrier | Seller is responsible for costs until the buyer's named freight carrier takes charge | Seller and Bayer | Split | N/A |
FAS - Free Alongside Ship (over water only) | Buyer arranges for the ocean transport - Seller is responsible for packing, labeling, preparing the goods for shipment, and delivering the goods to the dock | Seller: until the goods reach the dock - Buyer: from dock to destination | Buyer: all ocean transport costs - Seller is responsible for costs associated with transporting the goods to the dock | Cost of transporting goods to the dock |
FOB - Free On Board (over water only) | Seller arranges for ocean transport of the goods, preparing the goods for shipment, and loading the goods onto the vessel - The goods ship ocean freight collect | Buyer: once the items are on board | Seller: wharfage (charges to load the goods onto the ship) and freight forwarder fees | Costs, until on board |
CFR - Cost and Freight (over water only) | Seller has the same responsibilities as when shipping FOB, but shipping costs are prepaid by the seller, instead of shipping collect | Seller: until the shipment reaches the overseas dock. | Seller: costs of freight fees up to destination | Add Freight to cost of product |
CIF - Cost, Insurance, and Freight (over water only) | Seller has the same responsibilities as when shipping CFR with the addition of including a marine insurance policy | Seller: until the shipment reaches the overseas dock | Seller: insurance and freight forwarder fees | Insurance, freight, and costs of goods |