FAQs
List of Incoterms explained. Incoterms are categorized into two main groups to facilitate understanding and application in international trade: 7 rules for any mode of transport (EXW, FCA, CPT, CIP, DAP, DPU, DDP). 4 rules for sea and inland waterway transport (FAS, FOB, CFR, CIF).
What are Incoterms easily explained? ›
Incoterms, widely-used terms of sale, are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.
What are the 13 Incoterms? ›
Incoterms for Any Mode of Transport
- EXW (Ex Works) ...
- FCA (Free Carrier) ...
- CPT (Carriage Paid To) ...
- CIP (Carriage and Insurance Paid To) ...
- DAP (Delivered at Place) ...
- DPU (Delivered at Place Unloaded) ...
- DDP (Delivered Duty Paid) ...
- FAS (Free Alongside Ship)
What are the Incoterms of international trade? ›
What are INCOTERMS? INCOTERMS are the language you'll need when you're trading abroad, defining the trade contract responsibilities and liabilities between a buyer and a seller. They cover who is responsible for paying freight costs, insuring goods in transit and covering any import/export duties, for example.
What are the 11 Incoterms PDF? ›
For more information about all of the incoterm rule definitions, you can check out our Incoterms Glossary, highlighting the detail on all of 11 Incoterm international shipping regulations. EXW, FCA, CPT, CIP, DAP, DPU, DDP for any mode of transport. FAS, FOB, CFR, CIF for sea and inland waterway transport.
What are the 6 major Incoterms? ›
Incoterms for any mode of transport: EXW, FCA, CPT, CIP, DPU, DAP and DDP; Incoterms only for sea and inland waterway transport: FAS, FOB, CFR and CIF.
What Incoterms should I use? ›
The most popular incoterms for all forms or transport are typically:
- Ex-Works (EXW): ...
- Free Carrier (CA): ...
- Carriage Paid To (CPT): ...
- Carriage and Insurance Paid To (CIP): ...
- Delivered at Place (DAP): ...
- Delivered at Place Unloaded (DPU): ...
- Delivered Duty Paid (DDP): ...
- Free on Board (FOB):
Which Incoterms is best for buyers? ›
Because the seller will build shipping into the price of the goods, these Incoterms might be difficult for buyers to accept as they take on the risk — and cost — but have no control over the shipment until the goods arrive in their country. The Incoterms more favorable to buyers are DAT, DAP, and DDP.
What are the 4 groups of Incoterms? ›
What are the types of incoterms? Currently, there are 11 different incoterms. Each type is divided into four groups: E, F, C and D.
What does FOB mean? ›
FOB stands for “free on board” or “freight on board” and is a designation that is used to indicate when liability and ownership of goods is transferred from a seller to a buyer. Free on Board: Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.
Incoterms are a set of contractual provisions developed for international trade in goods. They are used to standardize and speed up trade between companies from different countries.
How to determine Incoterms? ›
In choosing the right incoterm, buyers and sellers must consider their experience level. For example, EXW Incoterm is not suitable for importers. A buyer with more experience importing goods can decide on Ex Works Incoterm. DAP, DDP, and DPU Incoterms are good for importers with little experience.
Why are Incoterms important? ›
The Incoterms® agreed-upon between a seller and a buyer will determine who pays and who is responsible for each phase in the transportation of goods from origin to destination. Both parties must understand and agree on the Incoterms® that apply to every order or shipment.
What are the 11 Incoterms 2010 rules? ›
2. Classification of the 11 Incoterms® 2010 rules
- EXW EX WORKS.
- FCA FREE CARRIER.
- CPT CARRIAGE PAID TO.
- CIP CARRIAGE AND INSURANCE PAID TO.
- DAT DELIVERED AT TERMINAL.
- DAP DELIVERED AT PLACE.
- DDP DELIVERED DUTY PAID.
What is the definition of each Incoterm? ›
INCOTERMS rules are grouped into 4 categories: The “E” term: (EXW) – The only term where the seller/ exporter makes the good available at his own premises to the buyer/ importer. The “F” terms: (FCA, FAS and FOB) – Terms where the seller/ exporter is responsible to deliver the goods to a carrier named by the buyer.
How many Incoterms are there in 2024? ›
There are 11 incoterms in 2024. Let's now explore them further.