Incoterms® 2010

International Commercial Terms

The International Commercial Terms, known as “Incoterms”, are internationally accepted terms defining the responsibilities of exporters and importers in the arrangement of shipments and the transfer of liability involved at various stages of the transaction. First published in 1936, the Incoterms rules have been periodically updated, with the eighth and last version (Incoterms® 2010) having been published on January 1st, 2011.

These terms are used to make international trade easier by helping traders in different countries understand each another. Because of these updates, contracts should specify which version of Incoterms they are using.

Incoterms 2010 Cover

Sea and Inland Waterway Transport

  • CFR - Cost and Freight

    The seller must pay the costs of bringing the goods to the specified port. The buyer is responsible for risks when the goods are loaded onto the ship.

  • CIF - Cost, Insurance and Freight

    The seller must pay the costs of bringing the goods to the specified port. They also pay for insurance. The buyer is responsible for risks when the goods are loaded onto the ship.

  • FAS - Free Alongside Ship

    The seller puts the goods alongside the ship at the specified port they’re going to be shipped from. The seller must get the goods ready for export, but the buyer is responsible for the cost and risk involved in loading them.

    This term is commonly used for heavy-lift or bulk cargo (eg generators, boats), but not for goods transported in containers by more than one mode of transport (FCA is usually used for this).

  • FOB -Free on Board

    The seller must get the goods ready for export and load them onto the specified ship. The buyer and seller share the costs and risks when the goods are on board. This term is not used for goods transported in containers by more than one mode of transport (FCA is usually used for this).

  • Any Mode or Modes of Transport

  • CIP - Carriage and Insurance Paid

    The seller pays for insurance as well as transport to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.

    CIP (‘Carriage and Insurance Paid’) is commonly used for goods being transported by container by more than one mode of transport. If transporting only by sea, CIF is often used (see below).

  • CPT - Carriage Paid To

    The seller pays to transport the goods to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.

  • DAP - Delivered at Place

    The seller pays for transport to the specified destination, but the buyer pays the cost of importing the goods. The seller takes responsibility for the goods until they’re ready to be unloaded by the buyer.

  • DAT - Delivered at Terminal

    The seller pays for transport to a specified terminal at the agreed destination. The buyer is responsible for the cost of importing the goods. The buyer takes responsibility until the goods are unloaded at the terminal.

  • DDP - Delivered Duty Paid

    The seller is responsible for delivering the goods to the named destination in the buyer’s country, including all costs involved.

  • EXW - Ex Works

    The seller makes the goods available to be collected at their premises and the buyer is responsible for all other risks, transportation costs, taxes and duties from that point onwards. This term is commonly used when quoting a price.

  • FCA - Free Carrier

    The seller gives the goods, cleared for export, to the buyer’s carrier at a specified place. The seller is responsible for getting them to the specified place of delivery. This term is commonly used for containers travelling by more than one mode of transport.

The name Incoterms® 2010, the articles displayed on this page and everything related to it are the property of the International Chamber of Commerce. This document is not intented as legal advice but is being provided for reference purpose only. The Incoterms® 2010 are available through the International Chamber of Commerce at www.iccbooks.com.

The definitions are provided by the United Kingdom Government, which you can find at www.gov.uk.