How to choose incoterms ?
Defining the right incoterms for your transport is decisive to establish a clear realtionship with your supplier / customer.
You will find here below the different incoterms and their definition, so you can make the right choice.
EXW
The seller (consignor) makes the transported goods available at an agreed location (minimum obligation for the seller). The buyer bears all the costs of transport and formalities
FCA-Free Carrier
The seller delivers the goods to the consignment designated and paid by the buyer. The transfer of risks is materialized during this operation. If the delivery is made at the seller's premises, he is responsible for loading the goods. If the delivery takes place in another place, the seller is no longer responsible for the unloading.
FAS (Free Alongside Ship)
The seller pays the transport costs to the port of embarkation and carries out the export formalities. The goods are delivered alongside the ship in the port designated by the buyer. This delivery marks the transfer of risks, costs and formalities to the buyer. The Incoterm FAS imposes on the seller the obligation to clear the export freight
FOB (Free on Board)
The seller delivers the goods on the ship to the agreed port of shipment. The transfer of charges and risks takes place when the goods are on board the ship. The seller must clear the goods.
CFR (Cost and Freight)
The seller takes care of the main transport to the port of destination. He takes care of the export formalities and must pay the related duties and taxes. The transfer of costs takes place upon arrival of the goods at the port of arrival, but the seller is no longer responsible for the goods as soon as they have been loaded at the port of departure.
CIF (Cost, Insurance and Freight)
The seller takes care of the main transport to the port of destination. He takes care of the export formalities and must pay the related duties and taxes. The transfer of costs takes place upon arrival of the goods at the port of arrival, but the seller is no longer responsible for the goods as soon as they have been loaded at the port of departure.
CPT (Carriage Paid To)
The goods are delivered to the first carrier abroad, costs paid by the seller, without transport insurance. The buyer assumes the risks and all other costs incurred by the goods upon delivery of the goods to the first carrier. The buyer is responsible for all operations that take place on arrival.
CIP (Cariage Insurance Paid to)
Incoterms rule identical to the CPT with the only difference being the insurance: the seller takes care of the transport insurance.
DPU (Delivered at Place Unloaded)
The seller organizes the transport and pays for the unloading at the place of destination. Once at the terminal, the buyer is responsible for the goods and must carry out the import formalities and pay the related duties and taxes.
DAP (Delivered at place)
The seller is responsible for transporting the goods to the agreed delivery point. He bears the costs and risks up to that point. The buyer bears the unloading and import customs clearance.
DDP (Delivery Duty Paid)
The seller delivers the goods to the buyer having taken care of everything, including import customs formalities and the payment of duties and taxes (maximum obligation for the seller).
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