Incoterms 2010 Compiled by :

J.RadhakrishnanJuly 2015

International Commercial Term Who defines INCOTERMS ?

The Incoterms rules are created and published by the International Chamber of Commerce (ICC) and are

revised from time to time. The most recent revision is Incoterms 2010 which came into force on 1st January 2011

What are INCOTERMS ?Incoterms are standard sets of trading terms and

conditions designed to assist traders when goods are sold and transported.

Common terms in Transport

• Seller• Buyer• Risk• Obligation• Responsibility• Insurance• Port• Consignor

• Main Carriage• Pre Carriage• Forwarder• Customs • Export / Import• Duties • Taxes• Consignee

Questions that decide the Incoterm

1) Who is responsible for the main carriage – the buyer or the seller?

2) If the seller is responsible for the main carriage, where does the risk pass from the seller to the buyer – before the main carriage, or after it?

What is Risk ?Why is insurance required ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Risk ?

Elements of Cost in transportation

Packaging Loading charges Delivery to the port / place Export duty and taxes Origin Terminal charges Loading on Carriage Carriage charges Insurance Destination terminal charges Delivery to destination Import duty & taxes

Classification of Incoterms

Group E : Departure termEXW

Group F : Shipment term- Main carriage unpaid FCA, FAS, FOB

Group C: Shipment term – Main carriage paidCFR, CIF, CPT, CIP

Group D: Arrival termDDP, DAP, DAT

Incoterm – Four Groups

• Buyer responsible for all carriage – EXW

• Buyer arranges main carriage – FAS; FOB; FCA

• Seller arranges main carriage, but risk passes before main carriage – CFR; CIF; CPT; CIP

• Seller arranges main carriage, risk passes after main carriage – DAT; DAP; DDP

South Carolina

EXW

Group E - Departure: EXW. Ex Works (named place)

SELLER

BUYER

------ = Buyer’s COST & CONTROL

South Carolina

FCAFASFOB

Group F - Main Carriage Unpaid: FCA Free Carrier (named place) – previously FRC FAS Free Alongside Ship (named loading port) FOB Free On Board (named loading port)

SELLER

BUYER

=Seller’s COST & CONTROL

------ = Buyer’s COST & CONTROL

FCA

FCA

South Carolina

CFRCIFCPTCIP

Group C - Main Carriage Paid: (by the seller)CFR Cost and Freight (named destination port) CIF Cost, Insurance and Freight (named destination port) CPT Carriage Paid To (named destination) CIP Carriage and Insurance Paid to (named destination

SELLER

BUYER

=Seller’s COST & CONTROL

------ = Buyer’s COST & CONTROL

CPTCIP

South Carolina

DDUDDP

Group D - Arrival: DAF Delivered At Frontier (named place) DES Delivered Ex Ship (named port) DEQ Delivered Ex Quay (named port) DDU Delivered Duty Unpaid (named destination place) DDP Delivered Duty Paid (named destination place)

SELLER

BUYER

=Seller’s COST & CONTROL

------ = Buyer’s COST & CONTROL

DESDEQ

DAF

DDUDDP