How do I use Incoterms?
When
incorporating Incoterms into a sales contract you will need two components: 1)
the abbreviated name of the rule/term you’re using and 2) a named place.
All 11 of the
Incoterms rules require one of the four named places:
1. Place
of delivery
2. Place
of destination
3. Port
of shipment
4. Port
of destination
In the example
below, FCA stands for “Free Carrier” and the rest of the entry specifies the
“named place of delivery” required in the rule.
Example: FCA,
Generic Cargo Terminal, Chicago O’Hare International Airport (ORD), USA
Shipping Terms Abbreviation Groups
The list below
breaks down the 11 Incoterms rules into four color-coded categories for easy
navigation and understanding.
Note that while
the Incoterms FAS, FOB, CFR and CIF are applicable to only sea or inland
waterway transport, all other terms can be used for all modes of
transportation—air, ground, rail and ocean.
You’ll find the
named place required for each rule in the parentheses after the rule’s name.
E terms - Departure
o
EXW - Ex Works
(Place of Delivery, Usually Seller’s Premises)
F terms - Main Carriage Unpaid
o
FCA - Free
Carrier (Place of Delivery)
o
FAS - Free
Alongside Ship (Port of Shipment)
o
FOB - Free On Board (Port
of Shipment)
C terms - Main Carriage Paid
o
CFR - Cost and
Freight (Port of Destination)
o
CIF - Cost, Insurance and
Freight (Port of Destination)
o
CPT - Carriage Paid To
(Place of Destination)
o
CIP - Carriage and
Insurance Paid To (Place of Destination)
D terms - Arrival
o
DPU -
Delivered at Place Unloaded (Place of Destination, Where Seller Unloads)
o
Formerly: DAT -
Delivered At Terminal (Terminal at Port or Place of Destination)
o
DAP -
Delivered At Place (Place of Destination)
o
DDP -
Delivered Duty Paid (Place of Destination)
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