Geocargo

What are Incoterms?

Incoterms, or International Commercial Terms, were created in 1936 and are the selling rules to which the buyer and seller of goods agree during international transactions.
Incoterms set out the tasks, risks and costs associated during the transaction of goods between the seller and buyer. These rules are accepted by governments and legal authorities around the world and help to reduce the risk of problems.

EXW – Ex Works

This is when the seller makes the goods available to the buyer at his premises or at another location, such as a warehouse or office.

The buyer bears almost all the costs and risks during the shipping process, while the seller has to make sure that the buyer has access to the goods.

DAP – Delivered on Premises

The seller delivers the goods and these ones are placed at the disposal of the buyer on the means of transport as soon as it arrives, ready for unloading at the named place of destination.

The seller covers the costs and risks associated with the transport of the goods to an agreed address.

DDP – Entregue com direitos pagos

The seller delivers when the goods are placed at the disposal of the buyer for import on the arriving means of transport ready for unloading at the named place of destination.

The seller assumes almost all responsibility during the shipping process and covers all costs and risks associated with the carriage of the goods to the agreed address.
In addition, the seller makes sure that the goods are ready for unloading, fulfils the export and import responsibilities and pays all taxes.

Other Incoterms Rules For Any Mode Of Transport.

CIP – Carriage and Insurance Paid to...

The seller has the same responsibilities as for CPT, but also takes out insurance for the named destination and pays for carriage.

The seller is required to purchase the maximum level of insurance cover indicated in Clause A (Institute Cargo Clauses) for the buyer's risk.

DPU – Delivered at Place of Unloading (formerly DAT)

DPU replaces the former incoterm DAT.

The seller delivers when the goods have been unloaded and are placed at the disposal of the buyer at the named place of destination.

The seller is responsible for the costs and risks associated with delivering the goods to an agreed place of unloading.

FCA – Free Carrier

The seller delivers the goods to the carrier or other person nominated by the buyer at the seller's premises or other named place.

The seller also needs to clear the goods for export.

CPT – Carriage Paid To

Same responsibilities of the seller as for FCA with one difference: the seller covers all delivery costs.

The seller must contract and pay for the transport costs necessary to bring the goods to the named place of destination.

FAS – Free Alongside Ship

The seller delivers when the goods are placed alongside the vessel (e.g. on a quay) nominated by the buyer at the named port of shipment.

The seller bears all costs and risks until the goods have been delivered alongside the vessel.

The risk of loss or damage of the goods occurs when the goods are berthed on the ship. The buyer bears all costs from that moment onwards.

FOB – FFree on Board

The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or when taking delivery of the goods already delivered.

The seller bears all costs and risks until the goods have been delivered on board the vessel. In addition, it still settles the export clearance.

The risk of loss or damage to the goods passes when the goods are on board the vessel.

The buyer bears all costs once the goods are on board.

CFR – Cost and Freight

The seller has the same responsibilities as in FOB, but also has to pay the cost of transporting the goods to the port.

The seller bears all responsibilities once the goods are on board.

The seller must contract and pay the costs and freight necessary to bring the goods to the named port of destination.

CIF – Cost Insurance and Freight

The seller has the same obligations as in the CFR, but also has to cover the costs related to insurance.

The seller is obliged to buy the minimum insurance coverage, which is 110% of the invoice value, in the currency of that invoice and contract.

Should the buyer require more comprehensive insurance, the seller must find the additional coverage and the buyer must bear the cost.

Incoterms

What are Incoterms?

EXW – Ex Works

DAP – Delivered on Premises

DDP – Entregue com direitos pagos

CIP – Carriage and Insurance Paid to...

DPU – Delivered at Place of Unloading (formerly DAT)

FCA – Free Carrier

CPT – Carriage Paid To

FAS – Free Alongside Ship

FOB – FFree on Board

CFR – Cost and Freight

CIF – Cost Insurance and Freight

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Incoterms

What are Incoterms?

EXW – Ex Works

DAP – Delivered on Premises

DDP – Entregue com direitos pagos

CIP – Carriage and Insurance Paid to...

DPU – Delivered at Place of Unloading (formerly DAT)

FCA – Free Carrier

CPT – Carriage Paid To

FAS – Free Alongside Ship

FOB – FFree on Board

CFR – Cost and Freight

CIF – Cost Insurance and Freight

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