What are INCOterms?
International Commercial Terms or INCOterms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. They are widely used in International commercial transactions or procurement processes as the use in international sales is encouraged by trade councils, courts and international lawyers.
A series of three-letter trade terms related to common contractual sales practices, the INCOterm rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. INCOterms inform sales contract defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer. However, it does not constitute contract or govern law. Also it does not define where titles transfer and does not address the price payable, currency or credit items.
The INCOterms rules are accepted by governments, legal authorities, and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. As such they are regularly incorporated into sales contracts worldwide.
Delivered Duty Paid
Cost of delivery, including duty, paid up to a named place in the country of importation. Applies to all modes of transport.
Delivered at Terminal
Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal. Applies to all modes of transport.
Delivered at Place
Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer. Applies to all modes of transport.
Carriage and Insurance Paid
Costs of carriage and insurance of the goods, duty unpaid to the named destination. Applies to all modes of transport.
Carriage Paid To
As for CIP, except that the cost of insurance is carried by the buyer.
Cost, Insurance and Freight
Cost of goods plus insurance and freight, duty unpaid, to a named port of destination. Sea or inland waterway transport only.
Cost and Freight
As for CIF except that the cost of insurance is covered by the buyer.
Free on Board
All costs up to delivery over the ship’s rail at the named port of shipment. Sea or inland waterway transport only.
Free Alongside Ship
All costs up to delivery on quay or in lighters at the named port of shipment. Sea or inland waterway transport only.
Costs of delivery, cleared for export, into the charge of the carrier named by the buyer at the named place or point. Applied mostly to air and rail transport but could be used for all modes.
The goods are made available to the buyer at the exporter’s premises, suitably packed unless otherwise arranged for a known means of transport.