Documente Academic
Documente Profesional
Documente Cultură
‘Incoterms’ has become a stock term in the international freight world. In fact it is a word that is copyrighted
by the International Chamber of Commerce (ICC). Following some years of discussion and drafting within
the ICC, they issued the first International Commercial Terms (Inco terms) in 1936. There have been 5
revisions since then, up to the latest – Incoterms 2010.
What is meant by Incoterms is a set of rules governing the distinct types of transportation around the World.
It codifies what is meant by each of the (currently) 11 identified and generally accepted types of freight
transaction that can be used between sender and recipient. It helps them to understand who owns the
goods at each stage, who is responsible in each case for the actual task of shipping, who pays for the
various cost elements, and who bears the associated risks (i.e. who pays in the event of damage or loss, at
a given point).
The United Nations Commission on International Trade Law (UNICTRAL) recognises these terms as being
the global standard for transportation; and they are available in 31 languages through ICC.
It should be noted that the parties to a shipping transaction may agree between themselves to use a
previous version, most likely the immediate predecessor, Incoterms 2000. The vast majority of trade,
however, is being done using Incoterms 2010.
Incoterms 2010
This latest version was launched in September 2010 but actually came into being on 1st January 2011. This
sometimes leads to confusion, with people referring to Incoterms 2011; and you may hear references to
Incoterms 2012 or Incoterms 2013. They are not, however, updated annually and the correct reference is
currently ‘Incoterms 2010’.
As we shall see, the Incoterms are described by 3-letter acronyms that aim to make them well-known and
understood anywhere, regardless of language.
This latest edition contains 11 terms. The first 7 are applied to any form of transportation: the final 4 are
applicable only to sea or waterway freight.
It is important to understand the concept of ‘delivery’ as it is understood in the freight industry. It does not
always mean the physical arrival of the goods at their destination. It actually means the point at which the
seller completes his contractual obligation (so in the case of Ex Works, that is when the buyer loads a lorry
with the goods at the seller’s plant).
It may also help to note the significance of the first letter in the terms:
C terms require the seller to pay for shipping.
D terms mean that the seller or shipper’s responsibility ceases at a specified point, and they deal with who
will pay pier, docking and clearance charges.
E terms mean that when the goods are ready to leave the seller’s premises, his responsibility ceases.
F terms mean that the primary cost of shipping is not met by the seller.
FOB (Free On Board), EXW (Ex Works) and FCA (Free Carrier) are the most familiar incoterms but there’s
much about these and the other options to learn. Because they are legal terms, written from a legal
perspective, incoterms can be confusing or easily misunderstood. And making the wrong choice might turn
your shipment into an expensive nightmare.
Individual Incoterms
EXW | FCA | FAS | FOB | CPT | CIP | CFR | CIF | DPU | DAP | DDP
What is Ex Works (EXW) Shipping Incoterm?
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The buyer is liable and responsible for almost every step. The seller is only responsible for the Bill of Lading
or Air Waybill, and ensuring that the goods are available for pickup at the named place, usually their factory,
at a time agreed with the forwarder.
If the seller is going to help load, make sure to include this elsewhere in the sales contract.
This shouldn’t be a problem if importing from China, but when selecting a forwarder, check that they are
able to arrange export customs clearance.
The buyer isn’t actually obliged to arrange a contract of carriage. This means that the buyer may sell the
goods on to a customer, who will then arrange collection.
Exporters should hand over a courier receipt or FCR to the buyer’s forwarder, rather than handing over
the Air Waybill or Bill of Lading.
Exporters won’t have direct evidence of export, should they otherwise be able to claim a rebate from
domestic sales tax.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is liable and responsible for all tasks in their country up until the goods are delivered to the carrier
at the named place, usually the terminal or a warehouse (e.g. consolidation centre). Unless the named place
is the terminal, the buyer will be liable and responsible for some tasks in the export country.
If the named place is a forwarder’s warehouse or some other terminal that is not the seaport or
airport, the seller remains liable and responsible for loading the truck at their premises, with the
carrier responsible for unloading the truck at the named place. The buyer is therefore liable and
responsible for some tasks in the export country (transportation and terminal charges).
The named place can also be the supplier’s factory, making it similar to EXW, excepting the supplier is
responsible for loading the truck. The buyer is therefore liable and responsible for some tasks in the
export country (transportation and terminal charges).
Irrespective of where the named place is, the seller is still responsible for all export and documentation
tasks. There’s one exception, which is relevant only for letter of credit payments: the buyer can now
instruct the carrier to add the word “aboard” onto the Bill of Lading.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is liable and responsible for all the steps in their country, up until the goods are alongside the ship,
or the terminal warehouse in the case of air freight. The buyer is responsible for loading.
Your Guide To Free On Board (FOB) Shipping: Meaning, Incoterms & Pricing
International trade is complicated.
And while no two countries have exactly the same laws, when it comes to freight there are many precepts
that are standardized worldwide.
This means that no matter where you ship from, you will encounter the same regulations. One of the most
prominent examples of this standardization is the International Commercial Term, or incoterm.
Simply put, an incoterm is the standard contract used to define responsibility and liability for the shipment of
goods. It plainly lays out how far along into the process the supplier will ensure that your goods are moved
and at what point the buyer takes over the shipment process.
It also has implications for your total freight costs. Of the 11 different incoterms that are currently used in
international freight, Free on Board (FOB) is the one that you will encounter most frequently.
This guide cuts through the legal jargon and explains everything you need to know about this common
incoterm in plain English.
In other words, the supplier is “free” of responsibility. ‘On board’ simply means that the goods are on the
ship.
As such, FOB shipping means that the supplier retains ownership and responsibility for the goods until they
are loaded ‘on board’ a shipping vessel. Once on the ship, all liability transfers to the buyer.
Expert's Note
The FOB incoterm is only applied to shipments being sent by sea or waterway.
1. You purchase goods from a supplier in China and agree to FOB shipping terms. The next three steps of
2. Your goods are packaged and loaded onto a truck (or another form of transportation) at the supplier’s
5. Once aboard, the rest of the journey from China is now both your liability and your expense. Anything that
There are situations where you may be responsible for covering costs before your goods are on board.
When you are shipping loose cargo (ie, not a full container), for example, your goods must go through
a Container Freight Station (CFS) to be consolidated into a container.
Just enter the dimensions and weight of your goods and specify the port of shipment, and you’ll get your
FOB price calculation instantly.
If you are sending a full container load (FCL), enter the information under the Containers tab.
What is the Difference Between FOB Shipping Point and FOB Destination?
The qualifiers of FOB shipping point and destination are sometimes used to reduce or extend the
responsibility of the supplier in an FOB shipping agreement.
With FOB shipping point, ownership of goods is transferred to the buyer once they leave the supplier’s
shipping point.
From there, the title for the goods transfers from the supplier to the buyer immediately and if anything
happens to the goods at any leg of the journey to the buyer from there, the buyer assumes all responsibility.
With FOB destination, ownership of goods is transferred to the buyer at the buyer’s loading dock.
Upon delivery of the goods to the destination, the title for the goods transfers from the supplier to the
buyer.
If anything happens to the goods on any leg of the journey to the buyer, the supplier assumes all
responsibility.
To further clarify, let’s assume that Claire’s Comb Company in the US purchases a container of The Wonder
Comb from a supplier based in China.
An FOB shipping point agreement is signed and the container is handed off to the freight carrier at the
shipping point.
If sending the container to the US costs $1000, Claire’s Comb Company is responsible for paying that sum in
full in order to get the goods.
FOB Costs: What is the Difference Between FOB and other sea shipping incoterms?
There are four incoterms that are applied exclusively to ocean shipments: FOB, FAS, CFR, and CIF.
Understanding the differences between each is as simple as knowing how much responsibility the buyer and
supplier assume under each agreement.
The buyer takes responsibility for the shipment once it is placed alongside the shipping vessel.
Unlike FOB shipping, the supplier is not required to ensure the safe movement from port to ship.
This includes any fees associated with export, in addition to the cost of sending your freight to the port of
destination.
Once the delivery is unloaded in the receiving country, responsibility is transferred to you.
CFR includes neither insurance nor the costs associated with getting the delivery to your final destination.
Also excluded are customs duties.
This means that your shipment is in the proverbial hands of the supplier through the process of transporting
them to a port and loading them aboard a ship. They also cover insurance costs.
The buyer still pays additional fees like customs clearance, however.
Depending on the agreement with your supplier, your goods may be considered delivered at any point
between the port of destination and your final delivery address.
CIF is a more expensive contract option than FOB, as is demands more effort and expense on the part of the
supplier.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is responsible and liable for all the steps in their country, or as far as the buyer’s forwarder’s
warehouse. The seller is also responsible for booking main carriage to a terminal in the buyer’s country, or
even further to the buyer’s warehouse. Either way, the seller is not liable after the goods arrive at the
terminal or warehouse in their own country.
By contrast, this incoterm is often an excellent choice for larger importers, if they have an agent
responsible for goods (clearing and delivery) once they reach the terminal at the import country.
If there is more than one carriage in the export country, e.g. via a forwarder’s warehouse for consolidation,
the seller is not liable or responsible for the middle man (second carriage), unless that is made clear in the
sales contract.
Risk (liability) and responsibility (for tasks and payment) are handed over at different points for C terms.
Risk is transferred in the export country when the carrier receives the shipment (at the named place of
delivery), even though the buyer has booked and paid for the main carriage.
When the incoterm is mentioned in a contract of sale, the named place immediately follows, e.g. EXW
(address of seller’s factory). For those incoterms where risk and responsibility are split, use the named
place of destination (responsibility). Be sure to specify the named place of delivery (liability) elsewhere in
the sales contract.
The buyer should arrange insurance cover from where liability is transferred (the named place of delivery),
i.e. the terminal in the export country.
One of the four C terms should be selected when the sales contract includes a letter of credit.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
This incoterm works exactly like CPT, excepting the seller is also responsible for arranging main carriage
insurance.
Refer to CPT, obviously excepting the tip on the buyer arranging insurance.
The seller need only arrange minimum insurance cover, to the invoice value of the goods. If the buyer
considers that this level of cover is not sufficient, an agreed level of cover can be included elsewhere in
the contract of sale.
Although the seller is responsible for insurance, the risk transfers to the buyer before the main carriage.
The seller is not obliged to arrange insurance for pre-carriage in the export country or carriage in the
import country unless this is specified elsewhere in the sales contract.
Also, importers who don’t have a representative at the port should be wary using this term, unless they are
sure that the carrier’s rates include terminal handling charges. If not, your seller’s forwarder will use a 3rd
party agent to manage import clearance, duties, and terminal charges. Many importers get caught with
inflated charges and dubious fees that they are effectively unable to challenge.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
This incoterm works exactly like CPT, excepting the seller is also responsible for arranging main carriage
insurance.
Refer to CPT, obviously excepting the tip on the buyer arranging insurance.
The seller need only arrange minimum insurance cover, to the invoice value of the goods. If the buyer
considers that this level of cover is not sufficient, an agreed level of cover can be included elsewhere in
the contract of sale.
Although the seller is responsible for insurance, the risk transfers to the buyer before the main carriage.
The seller is not obliged to arrange insurance for pre-carriage in the export country or carriage in the
import country unless this is specified elsewhere in the sales contract.
What is Delivered At Place Unloaded (DPU) Shipping Incoterm?
Part of the Comprehensive Incoterms Guide
Prior to the release of the ICC Incoterms 2020 update, this incoterm was known as DAT. The substance of the
incoterm has remained the same.
This incoterm can lead to problems as it involves two forwarders at a critical point.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller continues responsibility and risk into the import country, up until the shipment is unloaded. This
can occur at a number of locations, including the port, inland terminal, or forwarder’s warehouse.
The seller pays for unloading. The buyer is responsible for all charges after unloading, except (in theory)
any charges caused by delay, including demurrage charges at the terminal, which is generally the seller’s
responsibility.
That exception can get contentious. The seller has good grounds to refuse to pay if the buyer held up
import customs clearance. But, maybe that was because the seller submitted incorrectly in the first place.
Maybe that was the Customs broker’s error. Consider ways to avoid this type of dispute when negotiating
the contract, stage, e.g. the seller couriers some documents to the buyer before pickup; liability for
demurrage and other costs takes into account the above scenario, all information on documents to be
submitted to Customs must be double-checked. Basically, the buyer, seller, and carrier need to work
closely. Or instead, consider CPT (delivery to buyer’s warehouse).
Ensure that the seller can undertake all the necessary formalities in the buyer’s country, e.g. paying GST or
VAT.
Damages are more likely to occur between the buyer’s premises and the import country terminal than the
final leg to the buyer’s warehouse. However, this can be difficult to prove. Consider DAP instead.
If the named place is a clearance depot, or for more porous borders where Customs does pre-clearance at
the border, the shipment may be delivered to the named place uncleared. That is, payment to Customs is
still required.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller continues responsibility and risk into the import country, usually to the buyer’s preferred
warehouse (their own, FBA warehouse, the forwarder’s warehouse, etc). However, as for FCA, the named
place may be also be the terminal.
All tips and tricks for DAT also apply for DAP, excepting the first – responsible for unloading.
For DAT the seller is responsible for unloading. For DAP the buyer is responsible for unloading.
If the terminal is selected as the named place, DAP is exactly the same as DAT, excepting the seller pays
for unloading.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is liable and responsible for the entire shipment. The buyer is only responsible for unloading the
goods, including import clearance/payments. The named place of delivery is usually the buyer’s choice of
warehouse.
Some countries, including the US, do not permit forwarders to complete customs clearance. Therefore,
the supplier must be registered as an importer, or else they will not be able to complete import clearance.
Suppliers should also be experienced acting as an importer. Import clearance is complicated, and if the
process is not followed to the letter, the shipment is likely to be held up in Customs.
Therefore, the seller should insist on a copy of the entry documentation from the clearance agent to be
provided soon after submission, to check for errors. In some countries, Customs accepts timely
corrections.
Domestics sales tax can only be paid by locally-registered businesses. If the seller isn’t registered, the
buyer will probably become liable for sales tax. There is a workaround by qualifying the rule, e.g.
Delivered Duty Paid (Sales Tax unpaid).
DDP does not specifically require the seller to undertake import clearance. The buyer and seller may agree
that the buyer manages this task instead.
If the buyer offers to clear the goods for the seller, they should insist on using their own clearance agent.
Otherwise, they risk losing control of the shipment’s whereabouts. They could end up being responsible
for unnecessary costs, especially demurrage and storage. This can be overcome by specifying elsewhere in
the sales contract that the buyer is not liable for any additional costs caused by clearance agent error, and
is not liable for any costs beyond a short period (2-3 days) after carrier release.
A sales quotation from the supplier based on this incoterm is effectively the landed cost and can be used
to decide whether to source domestically or import.
Gerhard Hänel11.09.2019
Table of contents
1. Quick overview
2. What are Incoterms?
3. Validity of the Incoterms
4. Important changes of Incoterms 2010 to Incoterms 2020
5. Important changes of Incoterms 2000 to Incoterms 2010
6. List of Incoterms 2020 and Incoterms 2010
6.1 EXW - Ex Works
6.2 FCA - Free Carrier
6.3 CPT - Carriage Paid To
6.4 CIP - Carriage And Insurance Paid To
6.5 DAP - Delivered At Place
6.6 DAT - Delivered At Terminal
6.7 DPU - Delivered Named Place Unloaded
6.8 DDP - Delivered Duty Paid
6.9 FAS - Free Alongside Ship
6.10 FOB - Free On Board
6.11 CFR - Cost And Freight
6.12 CIF - Cost, Insurance And Freight
Quick overview
In order to avoid misunderstandings between buyer and seller, the contractual rights and obligations of each
contracting party should be determined as precisely as possible when concluding a sales contract. Otherwise,
misunderstandings, disputes or even judicial conflicts between the parties will occur more frequently,
especially when cross-border deliveries of goods are involved.
The International Chamber of Commerce (ICC) dealt with these circumstances back in 1936 and
formulated International Commercial Terms (Incoterms). The Incoterms are recognised worldwide and
regulate the rights and obligations of buyers and sellers in international trade, thereby standardising global
purchase transactions. The Incoterms have been repeatedly revised since they were first published in 1936.
In order to avoid any misunderstandings between the contracting parties, it makes sense to specify which
version of the Incoterms will be referred to in the sales contract. On 01.01.2011 the seventh revision of the
Incoterms was published. The Incoterms 2010 are valid until 31.12.2019 and will be replaced by a newer
version. The Incoterms 2020 were published on 10.09.2019 and are valid from 01 January 2020.
If buyer and seller agree on the use of the Incoterms, many important contractual conditions have already
been defined. Specifically, aspects such as import, transit and export, the conclusion of insurance and
transport contracts, the delivery action and place of delivery, the transfer of risk as well as information
obligations are defined.
Validity of Incoterms
The Incoterms are only valid, if they are expressly included in a contract. They are not legal regulations, which
is why the contractual partners are free to make individual adjustments to the proposed clauses. At this point
it should be added that the Incoterms cannot replace a classic sales contract. They do not contain detailed
information on, for example, terms of payment or at time of the transfer of ownership, nor do they take into
account product liability, the handling of defects and the legal consequences of breach of contract. The parties
must therefore make additional agreements despite the agreement on the Incoterms. By determining, for
example, the place of delivery or the place of performance, the Incoterms have influence precisely when
agreements are missing in the sales contract.
The transport of goods can now also be carried out using own vehicles
DAT was renamed to DPU and can now be unloaded at any agreed location
Insurance for CIP has been extended to clause ICC A (Institute Cargo Clauses)
FCA can include the forwarding of bills of lading to the seller by arrangement
Costs and safety requirements have been specified more precisely for each clause
DAF, DES, DEQ and DDU were replaced with DAT (Delivered At Terminal) and DAP (Delivered At
Place)
Enhancement of Risk Transfer for FOB, CFR and CIF
Additional explanations in the form of application notes for the individual clauses
Communication in electronic form is equivalent to communication in written form
Also applicable to domestic supplies
Below you can see the official list of the Incoterms 2020 and Incoterms 2010 by the ICC. The first part concerns
all modes of transport, while the second part is only relevant for maritime and inland waterway
transport. DAT exists only in Incoterms 2010 and will be replaced by DPU in Incoterms 2020.
EXW - Ex Works
EXW stipulates that the place of delivery is the seller's. Costs and risks are thus transferred to the
buyer as soon as the goods have been made available to the seller at the agreed time or at another
agreed place (e.g. factory, warehouse, etc.). The seller has thus fulfilled his contractual obligation as soon
as he has packed the goods and marked them accordingly. The transport costs, the procurement of the
necessary documents and the associated risks are the sole responsibility of the buyer.
FCA's costs and risks are transferred to the buyer when the goods are handed over from the seller to
the responsible carrier of the main transport. Depending on the agreement, the seller must also load the
goods. The seller has fulfilled his contractual obligation as soon as he has made the goods ready for
export and brought them to the agreed carrier or place. The buyer is responsible for the transit and import,
the costs of the main transport and the associated risks.
https://www.tradefinanceglobal.com/freight-forwarding/incoterms/fca-free-carrier/
The FCA clause in Incoterms 2020 includes the possibility for the buyer and seller to make an
agreement so that the buyer instructs the carrier to send the bill of lading to the seller.
Despite being recommended in place of FOB for cross-ocean container shipments this rule in practice is largely
unworkable for them. This is because in such shipments the buyer wants to only take on the risk of damage or
loss of the goods when they have actually been exported. They don’t want to be faced with any possibilities of
having to deal with any problems whatsoever in the exporting country.
The 2020 version introduced a new obligation on the buyer, if agreed, to instruct its carrier to issue an on board
bill of lading but while it is well-intentioned it is not a well-thought out provision and will fail in its execution. It
still leaves delivery being when the seller hands over the goods to the buyer’s carrier. The seller has no
obligation to actually put the goods on board, and if anything was to happen to the goods between delivery and
going on board, while at the buyer’s risk, the reality in such trade is that not only would the seller not be given
an board bill of lading but the buyer would not consider the goods exported and refuse payment. This new
provision was added mainly to deal with the seller’s needs for letters of credit but an unintended consequence
would be that usually the seller would end up being named as shipper on that bill of lading, imposing on them
liabilities that they neither knew about or accepted. It is also the only provision in the Incoterms® 2020 rules
which requires a party to instruct a carrier yet gives no direct remedy to the other party should the carrier fail to
act accordingly.
A1 (General Obligations)
In each of the eleven rules the seller must provide the goods and their commercial invoice as required by the
contract of sale and any other evidence of conformity such as an analysis certificate or weighbridge
document etc that might be relevant and specified in the contract.
Each of the rules also provides that any document can be in paper or electronic form as agreed to in the
contract, or if the contract makes no mention of this then as is customary. The rules do not define what
“electronic form” is, it can be anything from a pdf file to blockchain or some format yet to be developed in
the future.
B1 (General obligations)
In each of the rules the buyer must pay the price for the goods as stated in the contract of sale.
The rules do not refer to when the payment is to be made (before shipment, immediately after shipment,
thirty days after shipment, half now half later, or whatever) or how it is to be paid (prepayment, against an
email of copy documents, on presentation of documents to a bank under a letter of credit, or other
arrangement). These matters should be specified in the contract.
A2 (Delivery)
B2 (Delivery)
The buyer’s obligation is to take delivery when the goods have been delivered as described in A2.
Note that this rule does not discuss the means of transport at all, it merely mentions the carrier regardless of
how the carrier will arrange transport of the goods.
In all the rules the seller bears all risks of loss or damage to the goods until they have been delivered in
accordance with A2 described above. The exception is loss or damage in circumstances described in B3 below,
which varies dependent on the buyer’s role in B2
B3 (Transfer of risk)
The buyer bears all risks of loss or damage to the goods once the seller has delivered them as described in A2.
Additionally, if the buyer fails to have its carrier or another person give the required notice under B2, or that
person fails to take the goods from the seller, then the buyer bears all risks either from the agreed date or time,
or if no agreed date or time, then at the end of the agreed period.
For example, if the contract states the delivery must occur in June so the seller has the goods ready at their
premises to place on a truck provided by the buyer’s carrier, and that carrier informs the seller that he will
collect the goods on the 20th day of June but fails to do so, then buyer bears the risk of loss or damage to the
goods from the end of the contract period being 30th June.
B4 (Carriage)
The buyer must arrange for the carriage of the goods, whether by the buyer itself or a contracted carrier, at its
own cost from the named place of delivery. This allows for the buyer itself to take delivery of the goods such as
might occur in a domestic transaction. The exception is where, as stated in A4, the contract for carriage is
arranged by the seller.
Note that the contract of carriage needs to be specific as to where it commences. Remember that in A2 there are
two places the delivery can occur, either at the seller’s premises loaded onto the collecting vehicle, or not
unloaded from the seller’s vehicle at another place which is typically the carrier’s premises.
A5 (Insurance)
The seller does not have the risk beyond the delivery point so it has no obligation to the buyer to arrange a
contract of insurance. However, if the buyer requests, at its risk and cost, the seller must provide the buyer
with information in its possession that the buyer needs to arrange its insurance. If there is any information
which the buyer requests that is not already known to the seller, logically the seller can, and probably would,
choose to assist.
Nevertheless, and this is not covered by the Incoterms® 2020 rules, a wise seller would investigate taking
out marine insurance on a contingency basis. If the goods are lost or damaged in transit, and the buyer
therefore refuses to pay for them, in essence breaching the contract, the seller will want to have a fall-back
of being able to claim on its own marine insurance.
B5 (Insurance)
Despite having the risk of loss or damage to the goods from the delivery point, the buyer does not have an
obligation to the seller to insure the goods. Whether the buyer chooses to insure the goods or bear the risk
themselves is entirely their choice.
The seller must also package the goods, at its own cost, unless it is usual for the trade of the goods that they
are sold unpackaged, such as in the case of bulk goods. The seller must also take into account the transport
of the goods and package them appropriately, unless the parties have agreed in their contract that the
goods be packaged and/or marked in a specific manner.
B9 (Allocation of costs)
The buyer must pay the seller all costs relating to the goods from when they have been delivered, other than
those payable by the seller.
If the seller has been requested by the buyer to provide assistance in obtaining information or documents
needed for the buyer to effect carriage, import formalities, insurance and the transport document, then the
buyer must reimburse the seller’s costs.
Where applicable, the buyer pays any duties, taxes and other costs for transit or import clearance.
Additionally, and provided the seller has advised that the goods have been clearly identified as the goods under
the contract, the buyer pays any additional costs incurred if the buyer fails to nominate who is to take the goods
from the seller or that person fails to do so.
FCA A10 / B10: Notices
A10 (Notices)
Even though the buyer arranges its carrier or another person to take delivery of the goods, the seller must give
the buyer sufficient notice that either the goods have been delivered or that the carrier or another person has
failed to take delivery within the time agreed.
B10 (Notices)
The buyer must notify the seller of a number of things so that the seller can deliver and carry out any export
formalities. These are contact details and location of the carrier or another person who the seller is to deliver to;
the selected time, if any, in the agreed delivery period, such as when a container terminal is accepting cargo for a
particular vessel, or when an airline requires cargo for a specific flight; the mode of transport and any transport-
related security requirements.
Diagram: FCA – obligations from the seller and buyer, and where the transfer of risk between each party is transferred. Source: J Montezuma,
Creative Commons BY-SA CC 4.0
CIP corresponds to CPT, but the seller must also take over transport insurance for the transport from the time
of acceptance by the first carrier to the place of destination and bear its costs.
In the Incoterms 2020 the necessary insurance for deliveries has increased from clause ICC C to ICC A.
Further information on the clauses can be found here.
With DAP, the seller has already fulfilled his obligation to perform, if he has cleared the goods for export and
transit and makes them available on the arriving means of transport without having to unload the goods
himself. If the goods are available on the means of transport ready for unloading, costs and risks are already
with the buyer. The buyer is responsible for the import.
If the DAT clause is agreed, the seller undertakes to deliver the goods to a specific terminal (including a port
quay, warehouse, container depot, etc.). The seller has therefore fulfilled his contractual obligation when he
has prepared the goods for export and transit and unloaded them from the arriving means of transport at the
agreed destination. As soon as the seller has made the goods available to the buyer for collection, the costs
and risks are transferred to the buyer. The buyer is responsible for the import.
This clause is only valid within Incoterms 2010 and will be replaced by the DPU clause in Incoterms 2020.
DPU - Delivered Named Place Unloaded
The DAT clause from Incoterms 2010 will be replaced by the DPU clause within Incoterms 2020. In contrast
to the DAT clause, it is possible within the DPU clause to agree on any place and not just a specific
terminal. The DAT and DPU clauses are otherwise identical in content.
According to DDP, the seller clears the goods for export, transit and import and makes them available to the
buyer on the arriving means of transport ready for unloading at the place of destination. He bears the costs
and risks until the goods are ready for unloading.
With FAS, the seller takes over the export and transport of the goods to the long side of the transport
ship at the agreed port of shipment. The main transport costs and the transit and import are the
responsibility of the buyer. If the goods are on the long side of the ship, both costs and risks are transferred
to the buyer.
FOB - Free On Board**
CFR corresponds to FOB, with the difference that with FOB the buyer pays for the ship transport and with
CFR the seller. The risks are therefore transferred to the buyer after the goods have been loaded on board
the ship, but the costs are not transferred until the seller has had the goods transported to the port of
destination.
CIF corresponds to CFR, but the seller must also take over sea transport insurance for carriage by sea.