Incoterms or international
commercial terms are
a series of international sales terms widely used throughout the
world. They are used to divide transaction costs and
responsibilities between buyer and seller and reflect
state-of-the-art transportation practices. They closely
correspond to the U.N. Convention on Contracts for the
International Sale of Goods.
Incoterms deal with questions related to the delivery of the
products from the seller to the buyer. This includes the
carriage of products, export and import clearance
responsibilities, who pays for what, and who has risk for the
condition of the products at different locations within the
transport process. Incoterms are always used with a geographical
location and do not deal with transfer of title.
are devised and published by the International Chamber of
Commerce (ICC). The English text is the original and official
version of Incoterms 2000, which have been endorsed by the
United Nations Commission on International Trade Law (UNCITRAL).
Authorized translations into 31 languages are available from ICC
Group E - Departure:
Ex Works (named place): the seller makes the goods available at
Group F -
Main Carriage Unpaid:
Carrier (named place): the seller hands over the goods, cleared
for export, into
the custody of the first carrier (named by the buyer) at the
named place. This term is suitable for all modes of transport,
including carriage by air, rail, road, and containerized /
Alongside Ship (named loading port): free Alongside Ship: the
seller must place the goods alongside the ship at the named
port. The seller must clear the goods for export; this changed
in the 2000 version of the Incoterms. Suitable for maritime
+ FOB. Free On Board (named loading port): the classic
maritime trade term, Free On Board: seller must load the goods
on board the ship nominated by the buyer, cost and risk being
divided at ship's rail. The seller must clear the goods for
export. Maritime transport only.
Group C - Main Carriage
and Freight (named destination port): seller must pay the costs
and freight to bring the goods to the port of destination.
However, risk is transferred to the buyer once the goods have
crossed the ship's rail. Maritime transport only.
Insurance and Freight (named destination port): exactly the same
as CFR except that the seller must in addition procure and pay
for insurance for the buyer. Maritime transport only.
Carriage Paid To (named place of destination) the
general/containerized/multimodal equivalent of CFR. The seller
pays for carriage to the named point of destination, but risk
passes when the goods are handed over to the first carrier.
Carriage and Insurance Paid to (named place of destination): the
containerized transport/multimodal equivalent of CIF. Seller
pays for carriage and insurance to the named destination point,
but risk passes when the goods are handed over to the first
Container Terminal Order.
Group D -
Delivered At Frontier (named place)
Delivered Ex Ship (named port)