The terms in the first group below are applicable to all transport modes, including multimodal transport and maritime. Those in the second group apply only to maritime transport. Within each group, the terms are listed in increasing order of the seller’s responsibility for delivery of the goods. «Delivery» is the point at which the risks and responsibilities are transferred from the seller to the buyer. It does not mean the physical delivery of the goods to a specific physical destination.
Applicable to all transport modes:
EXW - ExWorks. The seller’s responsibility ends when it places the goods at its factory or warehouse for the buyer to pick up.
FCA - Free Carrier. The seller is required to deliver the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The seller is required for export clearance, if it’s an international transaction.
CPT - Carrier Paid To. It is similar to FCA, except that the seller must pay for transportation.
CIP - Carriage and Insurance Paid to. This is similar to CPT, except that it also requires the seller to pay for insurance covering loss or damage to the goods during the transport process.
DAT - Delivery at Terminal. This is one of the two new terms. The seller accomplishes the delivery when the goods once unloaded — whether by vessel, aircraft, truck, train or pipeline — are placed at the buyer’s disposal at the specified terminal at the port or destination specified in the contract of sale.
DAP - Delivery at Place. This is the other new term. Itis similar to DAT, except that delivery can be accomplished at any place mutually agreed upon.
DDP - Delivered Duty Paid. It is similar to DAP and DAT except that if it’s an international sale, the seller is required to arrange import clearance and pay any Customs duties.
Applicable only to sea or inland waterway transport:
FAS - Free Alongside Ship. The seller completes its responsibility to the buyer once the goods are placed alongside a vessel at a port named by the buyer.
FOB - Free on board. This is similar to FAS, except that the seller is responsible for the loading of the goods.
CFR - Cost and Freight. This gives the seller the additional responsibility of paying for the waterborne transportation. However, it does not necessarily designate the port from which the goods are to be shipped, so the buyer has to negotiate that with the seller if it wants to include the port.
CIF - Cost Insurance and Freight. This is similar to CFR, except that the seller is also responsible for buying insurance. It’s also similar to CIP, except that CIF only applies to marine transportation.
The four terms dropped in the 2010 revision of the Incoterms® rules are: DAF — Delivered at Frontier; DES — Delivered Ex Ship, DEQ — Delivered Ex Quay; and DDU — Delivered Duty Unpaid. DEQ was replaced by DAT; the others were replaced by DAP.