Incoterms stands for International commercial terms. These are a set of rules published by the International
Chamber of Commerce (ICC) which defines the responsibilities of buyers and
sellers for delivery of goods in international trade. The latest incoterms
rules were published in 2010 and these rules are known as Incoterms 2010.
There are 11 types of incoterms. These
can be divided into two categories:
Incoterms used for sea/inland waterway transport
– FAS, FOB, CFR, CIF
Incoterms used for any mode of transport –
EXW, FCA, CPT, CIP, DAT, DAP, DDP
Let’s discuss each of these rules in a
way that you can remember them easily.
Sea/Inland waterway transport
FAS:
FOB:
CFR:
CIF: Cost, Insurance and Freight
The seller pays for cost of carriage,
insurance and freight till the port of destination.
Any mode of transport
EXW: Ex Works
FCA: Free Carrier
CPT: Carriage Paid To
CIP: Carriage And Insurance Paid
To
CIP is the same as CIF except the fact
that CIP can be used for any mode of transport. The seller pays for cost of
carriage, and insurance till the port of destination.
DAT: Delivered At Terminal
DAP: Delivered At Place
DDP: Delivered Duty Paid
You may refer the below link for the
full text of Incoterms 2010 rules.
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