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Incoterms

Incoterms

Incotermsare the standard International transport agreements for commercial goods. These terms determine the division of liability and responsibility between the buyer and the seller.

The Incotermsare issued and published by the International Chamber of Commerce. The first edition of the Incotermsdates back to 1932. In order to keep up with the increasing amount of electronic data processing, the terms were revised in 1990.

In January 2020, the new Incoterms2020 came in to force.

The Incoterms2010 will remain in force, but we recommend that you use the new terms. These standard rules are used internationally, which creates clarity for both buyer and seller.

    Agreements

    You can agree to the following matters by means of an incoterm:

  • Who is responsible for transport insurances, licenses, authorizations and other formalities?
  • Who provides the transport and up to where?
  • When will the risks and costs of the delivery transfer from the seller to the buyer?
    • Different Incoterms

    There are 11 incoterms: 4 are intended specifically for transport by water. The other 7 apply to all kinds of transport (multimodal transport).

    Incoterms water:

  • FAS – Free Alongside Ship
  • FOB – Free on Board
  • CFR – Cost and Freight
  • CIF – Cost, Insurance and Freight

    • Incotermsmultimodal transport:

  • EXW – Ex Works
  • FCA – Free Carrier
  • CPT – Carriage Paid To
  • CIP – Carriage and Insurance Paid To
  • DPU – DeliveryAt Place Unloaded à DPUreplaces the term DAT
  • DAP – Delivered at Place
  • DDP – Delivered Duty Paid

    • The agreed incoterm between buyer and seller must be stated as follows:

    Agreed Incoterm – agreed place or port– Incoterms2020

    For example: CFRShanghai Incoterm 2020