Last Updated on June 24, 2022 by You Ling
CIF, CFR, FOB, FAS, DDP, DAP, DAT, CIP, CPT, FCA, EXW
INTERNATIONAL INCOTERM COMMERCIAL TERMS DEFINED
Incoterm commercial terms, also known as Price Terms (Or trade terms), are produced in long-term international trade practices and are used to indicate the composition of transaction prices and delivery conditions, and to determine risks, responsibilities, and cost divisions between buyers and sellers. problem-specific terminology.
What’s the main purpose of it?
- Conducive to both buyers and sellers to negotiate transactions and conclude contracts. Since each trade term has a unified interpretation of the obligations of buyers and sellers, it is helpful for buyers and sellers to clarify their respective rights and obligations, and to make deals as soon as possible.
- It is helpful for buyers and sellers to calculate prices and costs. Various trade terms clearly define who should pay for costs, freight, insurance and other expenses, and it is easier for buyers and sellers to calculate prices and costs.
- Conducive to the settlement of disputes in the performance of the contract. Since trade terms are explained by relevant international conventions, disputes between buyers and sellers in transactions can be explained through international trade conventions.
Top 11 incoterm commercial terms
EXW: The English abbreviation of “EX Works”, which means “Ex Works (designated place)” in Chinese. Using this term, the seller is responsible for placing the goods at the buyer’s disposal at its premises (factory, workshop, warehouse, etc.). The delivery obligation is fulfilled.
FCA: The English abbreviation of “Free Carrier”, which means “Freight Carrier” in Chinese. Using this term, the seller is responsible for clearing the goods for export, delivering the goods to the carrier designated by the buyer at the time and place agreed in the contract, and notifying the buyer in a timely manner.
CPT: The English abbreviation of “Carriage Paid to”, which means “Freight Paid to the Designated Destination” in Chinese. Using this term, the seller should enter into a contract of carriage at his own expense and pay the freight to deliver the goods to the destination. After going through the customs clearance procedures for the export of the goods, the goods shall be handed over to the carrier for processing at the agreed time and the designated place of shipment, and the buyer shall be notified in time.
CIP: The English abbreviation of “Carriage and Insurance Paid to”, the Chinese meaning is “freight and insurance paid to the designated destination”. Using this term, the seller shall enter into a contract of carriage and pay the freight to transport the goods to the destination at his own expense, and shall be responsible for the insurance procedures and payment of the insurance premium. After customs clearance of the goods for export, the goods are handed over to the carrier’s care at the designated place of shipment to fulfill their delivery obligations.
DAT: “Delivered At Terminal (insert named terminal port or place of destination) which means “delivery at terminal” in Chinese. Using this term, the seller delivers the goods to the port or destination specified in the contract within the date or period agreed in the contract delivery terminal at the place of delivery and unloads the goods from the arriving laden conveyance and delivers the goods when they are at the buyer’s disposal.
DAP: That is, “Delivered At Place” (insert name place of destination), destination delivery (insert specified destination port). Using this term, the seller must enter into a contract of carriage to pay the freight incurred to deliver the goods to a named destination or to an agreed point within a named destination; to place the contractually agreed goods at the named destination on the vehicle that has already arrived Delivery is complete when placed at the buyer’s disposal.
DDP: “Delivered Duty Paid” (named place of destination), delivery after tax. “Duty-paid delivery (…designated destination)” means that the seller completes the import customs clearance procedures at the designated destination, and then delivers the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery. The seller must bear all risks and costs of transporting the goods to the designated destination, including any “taxes” payable at the destination when customs formalities are required (including the responsibility and risk of customs formalities, and payment of handling charges, duties, taxes and other charges). The buyer has the greatest responsibility under the EXW term, and the seller has the greatest responsibility under the DDP term. This term should not be used if the seller cannot directly or indirectly obtain an import license.
FAS: the English abbreviation of “Free Alongside Ship”, the Chinese meaning is “delivery alongside the ship (designated port of shipment)”. Using this term, the seller is responsible for placing the goods on the dock or barge close to the ship at the port of shipment, i.e. the delivery is complete.
FOB: is the English abbreviation of Free on Board or Freight on Board, and its Chinese meaning is “Free on board at the port of shipment (….designated port of shipment)”. Using this term, the seller shall be responsible for handling export declaration formalities, delivering the goods to the ship designated by the buyer at the port of shipment and within the time limit specified in the contract, bear all risks before the goods cross the ship’s rail at the port of shipment, and promptly notify the buyer.
The risk transfer rules in this article have been revised in the “2010 Incoterms”. After the goods at the port of shipment are loaded onto the ship, the risk is transferred to the buyer. (Because the 2000 General Interpretation stipulates that the risk is transferred across the ship’s side, it is not easy to prove whether it is over the ship’s side, so it is revised.)
CFR: The English abbreviation of “Cost and Freight”, which means “cost and freight” in Chinese. Using this term, the seller is responsible for chartering and booking space under the usual conditions and paying the freight to the port of destination, according to the port of shipment specified in the contract Loading the goods on the ship, and notifying the buyer in time.
CIF: The English abbreviation of “Cost Insurance and Freight”, its Chinese meaning is “cost plus insurance, freight”. Using this term, the seller is responsible for chartering and booking space under the usual conditions and paying the freight to the port of destination, loading the goods on board the ship within the port of shipment and the shipping period specified in the contract, and is responsible for handling cargo transportation insurance and paying the insurance premium.
China is the largest exporter in the world. So most of the sellers and buyers came from here.
Also, We translated it into Chinese and help people to understand it.
贸易术语比较
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英文及缩写
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中文全称
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交货地点
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风险划分
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出口报关
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进口报关
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适用运输方式
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标价注明
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ex works
EXW
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工厂交货
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卖方处所
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买方接管货物后
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买方
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买方
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各种运输方式
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指定地点
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free carrier
FCA
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货交承运人
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合同规定的出口国内地、港口
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承运人接管货物后
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卖方
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买方
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同上
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同上
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free alongside ship
FAS
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船边交货
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装运港船边
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货交船边后
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卖方
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买方
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海运，内河运输
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装运港名称
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free on board
FOB
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船上交货
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装运港船上
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卖方
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买方
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同上
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同上
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cost & freight
CFR
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成本加运费
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同上
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同上
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卖方
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买方
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同上
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目的港名称
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cost insurance and freight
CIF
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成本加保险加运费
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同上
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同上
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卖方
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买方
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同上
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同上
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carriage paid to
CPT
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运费付至
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合同规定的出口国内地港口
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承运人接管货物后
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卖方
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买方
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各种运输方式
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目的地名称
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carriage & insurance paid to
CIP
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运费，保险费付至
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同上
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同上
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卖方
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买方
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同上
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同上
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delivered at frontier
DAF
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边境交货
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两国边境指定地
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买方接管货物后
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卖方
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买方
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多用于陆运方式
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边境指定地点
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delivered ex ship
DES
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目的港船上交货
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目的港船上
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买方在船上收货后
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卖方
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买方
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海运，内河运输及目的港船上交货的多式联运
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目的港名称
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delivered ex quay
DEQ
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目的港码头交货
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目的港码头
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买方在目的港收货后
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卖方
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买方
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同上
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同上
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delivered duty unpaid
DDU
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未完税交货
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进口国指定地
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买方在指定地收货后
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卖方
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买方
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任何运输方式
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目的地名称
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delivered duty paid
DDP
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完税后交货
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同上
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同上
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卖方
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卖方
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同上
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同上
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