OrangeLine

Incoterms

 Main Carriage Paid 

  • CFR – Cost and Freight
     
    This applies exclusively to sea shipping - all costs and freight expenses are paid for by the shipper. Once the cargo leaves the ship, all liability is transferred to the customer.
      
  • CIF – Cost, Insurance and Freight
     
    This applies exclusively to sea shipping - CIF terms are the same as CFR with the additional liability of the shipper to obtain and pay for the cargo's insurance.
     
  • CPT – Carriage Paid To
     
    A collective multi-transport method alternate to CFR. Shipment expenses to the destination are paid for by the shipper. Once the cargo reaches the first carrier - the liability passes.
       
  • CIP – Carriage and Insurance Paid
     
    A collective multi-transport method alternate to CIF. Shipment and insurance expenses to the destination are paid for by the shipper. Once the cargo reaches the first carrier - the liability passes.

 Main Carriage Unpaid 

  • FCA – Free Carrier
      
    This applies to all methods of transportation (eg. air, road, rail or combined shipping). The shipper transfers the cargo to the carrier, after clearing it for export, at a certain named pick up point - the carrier is chosen by the customer.
     
  • FAS – Free Alongside Ship
     
    This applies exclusively to sea shipping - after clearing the cargo for export, the shipper holds the liability to allocate the cargo beside the ship at the chosen port. (as of the 2000 version of Incoterms this has changed).
     
  • FOB – Free On Board
     
    This is the standard sea shipping term. After clearing the cargo for export, the shipper holds the liability to load the cargo to the ship chosen by the customer - the risk and expanses are divided at ship's rail.
     
  • FOT – Free On Truck
     
  • FOR – Free On Rail

Departure

  • EXW – Ex Works
      
    The shipper is only liable to assure cargo is ready for pick up at their premises - the customer holds all expanses liabilities.
     
    This term might be effortless to manage by the shippers, but may not fully serve their interests since they have no control over the chosen transportation method (which might not be suitable), the final destination of the cargo and there's a good chance the shippers could have offered better transportation costs than the customer received independently.

Arrival

  • DAF – Delivered At Frontier
      

    This applies to road and rail shipping - transportation to a chosen border is paid for by the shipper, the customer holds the liabilities to clear the cargo at customs and for the transportation from the border to their premises. When reached the border - risk is transferred from shipper to customer.
     
  • DES – Delivered Ex Ship
     
    Under this term, all freight and insurance expenses are paid for by the shipper same way as under CIF terms. In addition to these, shipper is also liable for the risk and title until the ship arrives at the chosen port - risk is transferred between shipper and customer only when the ship arrives at the chosen destination port and the cargo is free to be unloaded by the customer. Costs of the cargo's unloading, taxes, duties and so on are paid for by the customer.
     
    This term is often used when transporting bulk cargo such as grain or coal as well as when the shipper is using a ship owned or charted by them.
     
  • DEQ – Delivered Ex Quay
     
    This term holds the same conditions as in a DES term with the difference that risk is only transferred after the cargo has been unloaded at the chosen port.
     
  • DDU – Delivered Duty Unpaid
     
    The shipper transports the cargo to a chosen destination stated in the sale agreement. The customer holds the liability for all risks and expanses of unloading, duties or following transportation from the chosen destination. If the customer is interested in the shipper sharing risks and costs affiliated with the clearing for import process, unloading, following transport, duties and so on - this must be stated clearly in the sale agreement.
     
     
  • DDP – Delivered Duty Paid
     
    This term, sometimes referred to as "Free Domicile", is the most comfortable and extensive term for the customer. Under this term, the shipper pays for all freight and duties as well as bearing all risks until the cargo are delivered.
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