Depending on the incoterm and other terms between parties, find documents according to your shipping needs.
International Commercial Terms (‘Incoterms’) are internationally recognized standard trade terms used in sales contracts. They’re used to make sure buyer and seller know:
– Who is responsible for the cost of transporting the goods
– Who pays insurance, taxes and duties
– Where the goods should be picked up from
– Where the goods are transported to
– Who is responsible for the goods at each step during transportation.
Incoterms apply to both national and international sales.
Incoterms are used in contracts in a 3-letter format followed by the place specified in the contract (e.g. the port or where the goods are to be picked up). There are different terms for sea and inland waterways (e.g. rivers and canals) compared to all other modes of transport.
EXW (Ex Works) – any mode
The seller makes the goods available to the buyer at his premises on a specified date or within a specified time period. The buyer becomes responsible for loss or damage to the goods on the agreed upon date, or when the goods are picked up within the specified time period, or on expiration of the specified time period. Unless specifically agreed to, the seller is not responsible for loading the goods onto the conveyance at his premises. – Because the buyer is responsible for loss or damage during the “main carriage” EXW shipments would be insured under the buyer’s ocean cargo policy.
FCA (Free Carrier) – any mode
The seller gives the goods, cleared for export, to the buyer’s carrier at a specified place. The buyer is then responsible for getting transported to the specified place of final delivery.
CPT (Carriage Paid To) – any mode
The seller pays to transport the goods to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.
CIP (Carriage and Insurance Paid) – any mode
The seller pays for insurance as well as transport to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.
DAT (Delivered at Terminal) – any mode
The seller pays for transport to a specified terminal at the agreed destination. The buyer is responsible for the cost of importing the goods. The buyer takes responsibility once the goods are unloaded at the terminal.
DAP (Delivered at Place) – any mode
The seller pays for transport to the specified destination, but the buyer pays the cost of importing the goods. The seller takes responsibility for the goods until they’re ready to be unloaded by the buyer.
DDP/DTP (Delivered Duty Paid) – any mode
The seller is responsible for delivering the goods to the named destination in the buyer’s country, including all costs involved.
FAS (Free Alongside Ship) – ocean mode
The seller puts the goods alongside the ship at the specified port they’re going to be shipped from. The seller must get the goods ready for export, but the buyer is responsible for the cost and risk involved in loading them.
FOB (Free on Board) – ocean mode
The seller must get the goods ready for export and load them onto the specified ship. The buyer and seller share the costs and risks when the goods are on board.
CFR (Cost and Freight) – ocean mode
The seller must pay the costs of bringing the goods to the specified port. The buyer is responsible for risks when the goods are loaded onto the ship.
CIF (Cost, Insurance and Freight) – ocean mode
The seller must pay the costs of bringing the goods to the specified port. They also pay for insurance. The buyer is responsible for risks when the goods are loaded onto the ship.
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