Knowledge of INCOTERM

EXW – Ex Works

The buyer arranges the pickup of the freight from the supplier's designated ship site, owns the in-transit freight, and is responsible for clearing the goods through Customs. The buyer is responsible for completing all the export documentation. Cost of goods sold transfers from the seller to the buyer.

FCA - Free Carrier

The seller delivers goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer to the buyer after delivery to the carrier. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. The risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance.

 CPT – Carriage Paid To

The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier at place of shipment in the country of Export. Buyer fully responsible for arranging carrier payment of freight for same Export clearance in country of export and Import clearance in country of import. Not responsible for buying Insurance.

CIP – Carriage and Insurance Paid To 

The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. CIP is used for intermodal deliveries & CIF is used for Sea Mode.

DAT – Delivered at Terminal

This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the goods are import duty/taxes/customs costs.

DAP – Delivered at Place

Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods, ready for unloading from the arriving conveyance, at the named place. Duties are not paid by the seller.

DDP – Delivered Duty Paid

Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. With the delivery at the named place of destination all the risks and responsibilities are transferred to the buyer and it is considered that the seller has completed his obligations

FAS – Free Alongside Ship

The seller delivers when the goods are placed alongside the buyer's vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export, which is a reversal from previous Incoterms versions that required the buyer to arrange for export clearance. This term can be used only for sea or inland waterway transport.

FOB – Free on Board

The seller must advance government tax in the country of origin as off commitment to load the goods on board a vessel designated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel. The seller must clear the goods for export. The seller must instruct the buyer the details of the vessel and the port where the goods are to be loaded.

CFR – Cost and Freight

Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Insurance for the goods is NOT included. This term is formerly known as CNF(C&F, or C+F).

CIF – Cost, Insurance and Freight

Exactly the same as CFR except that the seller must in addition procure and pay for the insurance.