| INCOTERMS 2000 | ||||||||||||||
| Hoops and Hurdles | ||||||||||||||
| Transp Mode | Furnish Product | Package Goods | Pre-Carriage | Export License | Load Goods | Main Carriage | Insure | Import License | On-Carriage | *Make Payment | Where does Risk Pass? | |||
| EXW | Any | S | S | B | B | B | B | B | B | B | B | Seller' Place | ||
| FCA | Any | S | S | S | S | S or B | B | B | B | B | B | Named Carrier Named Point | ||
| FAS | Water | S | S | S | S | B | B | B | B | B | B | Alongside Vessell | ||
| FOB | Water | S | S | S | S | S | B | B | B | B | B | On Crossing Ship's Rail | ||
| CPT | Any | S | S | S | S | S | S | B | B | B | B | Delivery to First Carrier | ||
| CFR | Water | S | S | S | S | S | S | B | B | B | B | On Crossing Ship's Rail | ||
| CIP | Any | S | S | S | S | S | S | S | B | B | B | Delivery to First Carrier | ||
| CIF | Water | S | S | S | S | S | S | S | B | B | B | On Crossing Ship's Rail | ||
| DAF | Can/Mex | S | S | S | S | N/A | N/A | B or S | B | B | B | Border Location | ||
| DES | Water | S | S | S | S | S | S | S | B | B | B | On Ship at Import Dock | ||
| DEQ | Water | S | S | S | S | S | S | S | B | B | B | On Quay at Import Dock | ||
| DDU | Any | S | S | S | S | S | S | S | B | S | B | At Named Destination | ||
| DDP | Any | S | S | S | S | S | S | S | S | S | B | At Named Destination | ||
| *Depending on the agreed payment terms, the payment may be made anywhere on the time-line | ||||||||||||||
| Insure = party that should carry insurance | ||||||||||||||
Incoterms Tips
·
Incoterms
provide a set of international rules for the interpretation of the most
commonly used trade terms in foreign trade.
·
Incoterms
are used to define whether the buyer or seller bears the cost or obligation of
the transaction related to an international sale. The following defines all the necessary transactions related to
the international sale:
1.
Furnish
product
2.
Insurance
3.
Package
goods
4.
Pre-carriage
(moving goods from seller’s dock to main carriage)
5.
Export
clearance
6.
Load
goods on main carriage
7.
Main
carriage
8.
Customs
Clearance
9.
On
carriage (moving goods from main carriage to buyer’s facility)
·
Incoterms
does not define where title of transfer occurs. It does define where risk is transferred.
·
Uniform
Commerical Code only applies in the United States. It is not recognized internationally.
·
Ex
Works – provides the minimum obligation to seller.
·
DDP
– provides the maximum obligation to seller.
·
The
following Incoterms are used strictly for Ocean
or inland water shipments (do not use them for air or surface
transportation: FAS, FOB, CFR, CIF,
DES, and DEQ.
·
The
following Incoterms are used for any type of transportation: FCA, CPT, CIP, DAF, DDU, and DDP.
·
Do
not confuse the FOB Incoterm used for international transportation with the US
Domestic FOB Incoterm. FOB for
international transportation is to be used only for water transportation. The definition of the US Domestic FOB
Incoterm is not recognized by other countries and should only be used when
transportation occurs within the United States.
·
Use
DAF for surface transportation only.
This Incoterm was created for shipments between two bordering countries
that involves only two modes of shipping.
(i.e., US to Mexico that is moved by truck).
·
Since
Incoterms 1990 is still effective, make sure you include in your contract the
Incoterms you are referencing, i.e., DDP, Incoterms 2000.
·
EXW,
FCA, FAS, FOB, CPT, CFR, DAF, DDU, DDP, DES, and DEQ does not require either buyer
or seller to obtain insurance. CIP, CIF
requires seller to provide minimum insurance coverage.