incoterms

What is incoterm?

Incoterms, or International Commercial Terms, are a set of international rules to define commercial terms used in foreign trade transactions. The Incoterms specify who is responsible for the cost and risk involved in transporting goods from the exporter to the importer.

These terms were developed by the International Chamber of Commerce and are updated regularly. Incoterms are used around the world to ensure that purchase and sale contracts are executed fairly and efficiently.

Check below the Incoterms and their descriptions:

Code	Description
EXW	"EX WORKS (named place of delivery) AT ORIGIN (named place of delivery) The seller merely makes the goods available to the buyer at the seller's establishment, within the established period, not being responsible for the clearance for export or for the loading of the goods in any collection vehicle. Usable in any mode of transport. Note: as the foreign buyer does not have the legal conditions to provide clearance for the goods to leave the country, it is understood that this measure is adopted by the seller, at his own expense and risks, in the case of Brazilian exports."
FCA	"FREE CARRIER (named place of delivery) FREE ON CARRIER (named place of delivery) The seller completes his obligations and terminates his responsibility when he delivers the goods, cleared for export, to the carrier or other person indicated by the buyer, at the named place from the country of origin. Usable in any mode of transport. Buyer and seller may use their own transport for parts of the journey."
FAS	"FREE ALONGSIDE SHIP (named port of shipment) FREE ALONGSIDE SHIP (named port of shipment) The seller ends his obligations when the goods are placed, cleared for export, along the side of the carrier ship indicated by the buyer, on the pier or in vessels used to load the goods, at the port of shipment named by the buyer. Usable exclusively in water transport (sea or inland waterway)."
FOB	"FREE ON BOARD (named port of shipment) FREE ON BOARD (named port of shipment) The seller ends his obligations and responsibilities when the goods, cleared for export, are delivered, stowed, on board the ship at the port of shipment, both indicated by the buyer, on the date or within the agreed period. Usable exclusively for water transport (sea or inland waterway)."
CFR	COST AND FREIGHT (named port of destination) COST AND FREIGHT (named port of destination) In addition to bearing the obligations and risks foreseen for the FOB term, the seller contracts and pays the freight and costs necessary to take the goods to the agreed port of destination .
CIF	COST, INSURANCE AND FREIGHT (named port of destination) COST, INSURANCE AND FREIGHT (named port of destination) In addition to bearing the obligations and risks foreseen for the FOB term, the seller contracts and pays freight, costs and insurance related to the transport of the goods to the combined destination port. Usable exclusively in water transport (sea or inland waterway).
CPT	CARRIAGE PAID TO (named place of destination) CARRIAGE PAID TO (named place of destination) In addition to bearing the obligations and risks foreseen for the FCA term, the seller hires and pays freight and costs necessary to take the goods to the agreed place of destination . Usable in any mode of transport.
CIP	CARRIAGE AND INSURANCE PAID TO (named place of destination) TRANSPORTATION AND INSURANCE PAID UNTIL (named place of destination) In addition to bearing the obligations and risks foreseen for the FCA term, the seller contracts and pays freight, costs and insurance related to the transport of the goods to the agreed destination. Usable in any mode of transport.
DBH	DELIVERED AT PLACE (named place of destination) DELIVERED AT PLACE (named place of destination) The seller completes his obligations and ends his responsibility when he makes the goods available to the buyer, on the date or within the agreed period, at a place indicated in the country of destination, ready to be unloaded from the transport vehicle and not cleared for importation. Usable in any mode of transport. Buyer and seller may use their own transport for parts of the journey.
DPU	DELIVERED AT PLACE UNLOADED (named place of destination) DELIVERED AT PLACE UNLOADED (place of destination) The seller completes his obligations and terminates his responsibility when the goods are made available to the buyer, on the date or within the agreed period, at a location specified in the country of destination, unloaded from the carrier vehicle but not cleared for import. Usable in any mode of transport. Buyer and seller may use their own transport for parts of the journey. Term defined to replace the DAT, with the difference that the DAT determined "delivery" exclusively at cargo terminals, with the DPU being able to be used at terminals or any other specific location (for example, the buyer's warehouse).
DDP	DELIVERED DUTY PAID (named place of destination) DELIVERED WITH DUTY PAID (named place of destination) The seller fulfills his obligations and ends his responsibility when the goods are made available to the buyer, on the date or within the agreed period, at the place of destination designated in the importing country, not unloaded from the means of transport. The seller, in addition to clearance, assumes all risks and costs, including taxes, fees and other charges incurred on import. Usable in any mode of transport. Buyer and seller may use their own transport for parts of the journey. Note: due to the fact that the foreign seller does not have the legal conditions to provide clearance for the entry of goods into the country, this term cannot be used in Brazilian imports, and the DPU or DAP must be chosen in the case of preference for a condition disciplined by the ICC .