The following list of Incoterms 2010 is provided as a guideline. The complete detailed definitions can be found in the Incoterms 2010 book published by the International Chamber of Commerce (ICC).

INCOTERMS Importer-Exporter Responsibility Matrix

The order of Incoterms 2010 are listed from multimodal use to only ocean use:

Multimodal: Ex-works, FCA, CPT, CIP, DAT, DAP, DDP

Ocean mode only: FOB, FAS, CFR, CIF

General Points About Incoterms

• 11 terms of shipment and delivery for use in contracts for the business-to-business sales/purchases of tangible, portable goods, provided by the International Chamber of Commerce for implementation January 1, 2011.
• Country neutral, but for international use are influenced by the United Nations Convention on Contracts for the International Sale of Goods (CISG).
• Available worldwide through nearly 100 International Chamber of Commerce National Committees.
• Always accompanied by a geographic place.
• Updated to reflect current trade practice and subject to future replacement as necessary (recent average lifespan = 10 years).
• Used exclusively in sales/purchase contracts.
• Referred to throughout as Incoterms rules.

EX WORKS (EXW) + NAMED PLACE (place where the shipment originates – usually the seller’s premises).

Transport mode:  all (or more precisely, none).

Insurance:  neither party required to insure.

Breakdown

Seller: have goods available when promised and packaged to the extent known or agreed.

Buyer: everything else (pre-carriage, export clearance, main carriage, import clearance, on-carriage).

FREE CARRIER (FCA) + NAMED PLACE (either place where shipment originates – usually the seller’s premises – or another place on the seller’s side.)

Transport mode: all

Insurance:  neither party required to insure.

Breakdown:

A) When accompanied by the place where the shipment originates.

Seller: have goods available when promised, packaged to the extent known or agreed, load collecting vehicle, export clearance.

Buyer:  everything else (pre-carriage, main carriage, import clearance, on-carriage).

B) When accompanied by another place on the seller’s side.

Seller: have goods available when promised, packaged to the extent known or agreed, load delivering vehicle, pre-carriage, export clearance.

Buyer: everything else (unload delivering vehicle, main carriage, import clearance, on-carriage).

General: Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract. This is new.

When used with a place other than the origin point, keep in mind that FCA is designed for use in shipment contracts and not with destination points.  FCA + origin point is the practical minimum seller obligation rule. 

CARRIAGE PAID TO (CPT) + NAMED PLACE (on the buyer’s side).

Transport mode:  all

Insurance:  neither party required to insure.

Breakdown:

Seller: deliver the goods appropriately packaged to the carrier for transportation to the named place of destination and pay all transport costs thereto.  (The seller delivers at the first carrier unless specified otherwise in the sales contract.), export clearance.

Buyer: unloading , import clearance, on carriage.  Note:  seller not obligated.

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  This is new. Sellers are warned to contract to the agreed point as additional expenses are not recoverable from buyers. Ideal for multimodal transport.

CARRIAGE AND INSURANCE PAID TO (CIP) + NAMED PLACE (on the buyer’s side)

Transport mode: all

Insurance: seller must provide at least minimum cover.

Breakdown:

Seller: deliver the goods appropriately packaged to the carrier for transportation to the named place of destination and pay all transport costs thereto. (The seller delivers at the first carrier unless specified otherwise in the sales contract.), insurance, export clearance.

Buyer: unloading, import clearance, on-carriage.

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  This is new.  Sellers are warned to contract to the agreed point as additional expenses are not recoverable from buyers. Consider additional insurance coverage.  Buyers may also consider contingency insurance. 

DELIVERED AT TERMINAL (DAT) + NAMED PLACE (terminal on buyer’s side)

Insurance:  neither party required to insure.

Breakdown:

Seller: export clearance, deliver the goods appropriately packaged at the named destination terminal and pay all transport costs thereto, unloading.

Buyer: import clearance, on carriage.

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  This is new.

Sellers are warned to contract to the agreed point at the destination terminal as additional expenses are not recoverable from buyers.

This is the only Incoterms rule that specifically tasks the seller with unloading.

International use:  Ideal for multimodal transport. 

DELIVERED AT PLACE (DAP) + NAMED PLACE (on the buyer’s side)

Transport mode:  all

Insurance:  neither party required to insure

Breakdown:

Seller: export clearance, deliver the goods appropriately packaged at the named destination and pay all transport costs thereto.

Buyer: unloading, import clearance, on carriage.

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  This is new. Sellers are warned to contract to the agreed point at the destination as additional expenses are not recoverable from buyers. 

DELIVERED DUTY PAID (DDP) + NAMED PLACE (on the buyer’s side)

Transport mode:  all

Insurance:  neither party required to insure

Breakdown:

Seller: export clearance, deliver the goods appropriately packaged and cleared for import at the named destination and pay all transport costs thereto.

Buyer: unloading, on carriage.

General: Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract. This is new. Sellers are warned to contract to the agreed point at the destination terminal as additional expenses are not recoverable from buyers. Extremely risky for sellers. Buyers bear the risk of delayed arrival caused by faulty import clearance by seller-appointed customs brokers. Also drawback becomes awkward if possible at all.

FREE ALONGSIDE SHIP (FAS) + NAMED PLACE (alongside a vessel at port on the seller’s side)

Transport mode: vessel only.

Insurance:  neither party required to insure.

Breakdown:

Seller delivers goods appropriately export packed alongside the buyer-designated vessel at the port on the seller’s side, export clearance.

Buyer: everything else (vessel loading, main carriage, import clearance, on carriage).

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  New provision for sale of pre-delivered goods. Parties should agree on proof of delivery document (mate’s receipt).  

FREE ON BOARD (FOB) + NAMED PLACE (loaded on a vessel at a port on the seller’s side)

Transport mode: vessel only.

Insurance:  neither party required to insure.

Breakdown:

Seller delivers goods appropriately export packed on board the buyer-designated vessel at the port on the seller’s side, export clearance.

Buyer: everything else (main carriage, import clearance, on-carriage).

General: Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract. "Ship's rail" is no longer mentioned in this rule. The parties should agree on exactly what loaded on board means in their sales contract, as this varies per type of vessel, commodity, etc. New provision for sale of pre-delivered goods.

COST AND FREIGHT (CFR) + NAMED PLACE (a port on the buyer’s side)

Transport mode:  vessel only

Insurance:  neither party required to insure.

Breakdown:

Seller delivers goods appropriately export packed on board the seller-designated vessel at the port on the seller’s side and pays transportation costs to the agreed port on the buyer’s side, export clearance.

Buyer: everything else (vessel unloading, import clearance, on carriage).

General: Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  "Ship's rail" is no longer mentioned in this rule. The parties should agree on exactly what loaded on board means in their sales contract, as this varies per type of vessel, commodity, etc. Sellers are warned to contract to the agreed point as additional expenses are not recoverable from buyers.New provision for sale of pre-delivered goods.

COST INSURANCE AND FREIGHT (CIF) + NAMED PLACE (a port on the buyer’s side)

Transport mode:  vessel only.

Insurance:  seller must provide at least minimum cover.

Breakdown:

Seller delivers goods appropriately export packed on board the seller-designated vessel at the port on the seller’s side and pays transportation costs to the agreed port on the buyer’s side, insurance, export clearance.

Buyer: everything else (vessel unloading, import clearance, on-carriage).

General:  Incoterms specifically does not task either party with container stowage, which should be addressed elsewhere in the contract.  “Ship’s rail” is no longer mentioned in this rule.  The parties should agree on exactly what loaded on board means in their sales contract, as this varies per type of vessel, commodity, etc.  This is new.

Sellers are warned to contract to the agreed point as additional expenses are not recoverable from buyers. New provision for sale of pre-delivered goods.