Incoterms 2010 - Quick Reference Guide
The INCOTERMS (International Commercial Terms) are a set of definitions of international trade terms,
such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC). It defines the
trade contract responsibilities and liabilities between buyer and seller. The exporter and the importer need
not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a
commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the
freight, cargo insurance, and other costs and risks.
The INCOTERMS was first published in 1936---INCOTERMS 1936---and it is revised periodically to keep
up with changes in the international trade needs. The complete definition of each term is available from
the current publication---INCOTERMS 2010. The publication is available at your local Chamber of
Commerce affiliated with the International Chamber of Commerce (ICC). Many importers and exporters
worldwide are accustomed to and may still use the INCOTERMS 1980, the predecessor of INCOTERMS
1990 and INCOTERMS 2000.
Description Notes
Term
Seller is only responsible for making the goods available at
EXW Ex-Works (Named Origin) the seller’s premises. The buyer bears the full risk from
there to the destination.
Seller is responsible for delivery to the custody of the
FCA Free Carrier (Named Origin or Port) carrier, which is provided by the buyer. Risk is transferred
as soon as loading has taken place.
Seller delivers the goods to the carrier at an agreed place of
delivery and pays for transport to the named destination.
CPT Carriage Paid to (Named Destination Port)
Risk is transferred at the place of delivery, whereas seller
pays for transport to the destination.
Seller delivers the goods to the carrier at an agreed place of
delivery and pays for transport and insurance to the named
CIP Carriage & Insurance Paid to (Named Destination Port) destination. Risk is transferred at the place of delivery,
whereas seller pays for transport and insurance to the
destination.
Seller delivers the goods unloaded at a specified place
Delivered At Terminal (Named Destination Terminal
DAT inside the agreed terminal. Risk is transferred as soon as the
City)
goods have been unloaded.
Seller delivers the goods to the disposal of the buyer on the
arriving means of transport at the agreed place. Seller
DAP Delivered At Place (Named Destination Door)
assumes the risk until the goods are made ready for
unloading from the arriving means of transport.
Seller is responsible for bringing the goods to the
destination, paying any duty and making the goods
DDP Delivered Duty Paid (Named Destination Door) available to the buyer. Risk is transferred as soon as the
buyer has access to the goods ready for unloading at the
agreed destination.
Seller is responsible for delivery of the goods at the quay
FAS Free Along Side (Named Port of Departure) alongside the ship. From this point onwards, risk lies with
the buyer.
Seller is responsible for delivery of the goods loaded on
FOB Free On Board (Named Origin or Port of Departure) board the ship. Risk is transferred as soon as the goods have
been set down inside the ship.
Seller covers cost of freight, duty unpaid, to the named port
CFR Cost & Freight (Named Port of Entry) of destination. Risk is transferred as soon as the goods have
been set down inside the ship.
Seller covers cost of insurance and freight, duty unpaid, to
CIF Cost, Insurance & Freight (Named Port of Entry) the named port of destination. Risk is transferred as soon as
the goods have been set down inside the ship.
