INCOTERMS (International Commercial terms)

Incoterms = which stands for International Commercial Terms, refers to the terms and conditions governing the delivery of goods between a seller and a buyer. They clarify the scope of responsibilities, costs, and risks that may arise from the transaction.

Incoterms are divided into 11 terms.

EXW – Exworks
With this delivery method, the seller is responsible for the goods, ensuring they are complete and free from damage, only at the point of sale, such as a retail store or factory. This term is often referred to as "factory price."

FCA – Free Carrier
For this type of shipment, the seller is responsible for the cost of transporting the goods only to the airport or customs, in preparation for export by air or sea. Once the goods are on the transport vehicle, the seller is responsible for the shipping costs and other costs will be the responsibility of the buyer. Therefore, the price already includes shipping costs by air or sea.

FAS – Free Along Side
As the name suggests, it's free, meaning there are no charges from the point of origin to the port, transport hub, or airport. Therefore, the seller is responsible for the goods only until they reach the final destination, which is the ship's deck at the port of origin. After that, the buyer is responsible for all costs and risks.

FOB – Free Onboard Vessel
The seller will be responsible for all expenses until the goods are loaded onto the ship or plane. After the goods have departed and arrived at their destination, the buyer is responsible for all costs.

CFR – Cost and Freight
The seller is responsible for the shipping costs, customs duties at the destination, and assumes all risks when the goods arrive at the ship or airplane. If any risks occur during aircraft or ship departure, the seller will not be held responsible.

CIF – Cost, Insurance & Freight
In this term, the seller is responsible for all costs associated with shipping the goods, such as freight and insurance, from the moment they reach the ship until they arrive on board. If damage occurs on board the ship, the seller is responsible, but the seller's responsibility ends when the goods arrive at the destination port.

CIP – Carriage and Insurance Paid To
The seller will cover the period until the goods are received by the agent or logistics company. To ensure the goods reach the buyer in perfect condition, the seller will cover insurance, customs duties, and shipping costs, etc.

CPT – Carriage Paid To
The seller is responsible for all costs up to the final destination where the shipping company picks up the goods. These liabilities, including shipping costs and insurance, end when the goods are delivered to the shipping company.

DDU – Delivery Duty Unpaid
This term defines complete delivery of goods when they are unloaded from the truck or delivered to a specified destination, such as the buyer's warehouse, home, or office.

DAP – Delivered At Place
During this term, the seller is responsible for everything except import taxes in each destination country and insurance costs in case of unforeseen events. These will be the responsibility of the buyer.

DDP – Delivered Duty Paid
This term is particularly popular with buyers because the seller is responsible for all costs, including transportation (truck, ship, air), insurance, and customs fees. The buyer bears no responsibility whatsoever.