Click on the abbreviations below for a complete description.
Ex W - FCA-
FOR - FOT
- FAS - FOB
- FOB Airport
- C & F
CIF - CPT
- CIP - DES
- DEQ - DAF
- DDP - DDU
"Ex works" means the seller's only responsibility is to make
the goods available at the seller's premises, i.e., the works or factory.
The seller is not responsible for loading the goods on the vehicle provided
by the buyer unless otherwise agreed. The buyer bears the full costs and
risk involved in bringing the goods from there to the desired destination.
Ex works represents the minimum obligation of the seller.
FCA or Free Carrier
This term has been designed to meet the requirements of multimodal transport,
such as container or roll-on, roll-off traffic by trailers and ferries.
It is based on the same name principle as F.O.B. (free on board), except
the seller fulfills its obligations when the goods are delivered to the
custody of the carrier at the named point. If no precise point can be
named at the time of the contract of sale, the parties should refer to
the place where the carrier should take the goods into its charge. The
risk of loss or damage to the goods is transferred from seller to buyer
at that time and not at the ship's rail. The term "carrier"
means any person by whom or in whose name a contract of carriage by road,
rail, air, sea, or a combination of modes has been made. When a seller
has been furnished a bill of lading, way bill or carrier's receipt, the
seller duly fulfills its obligation by presenting such a document issued
by a carrier.
FOR or FOT
"F.O.R." and "F.O.T." mean "free on rail"
or "free on truck." Both refer to goods being carried by rail
and should only be used when the goods are carried by rail. The risk of
loss or damage is transferred when the goods are loaded onto the rail.
"F.A.S." or "free alongside ship" requires the seller
to deliver the goods alongside the ship on the quay. From that point on,
the buyer bears all costs and risks of loss and damage to the goods. Unlike
F.O.B., F.A.S. requires the buyer to clear the goods for export and pay
the cost of loading the goods.
Under "F.O.B." or "free on board," the goods are placed
on board the ship by the seller at a port of shipment named in the sales
agreement. The risk of loss of or damage to the goods is transferred to
the buyer when the goods pass the ship's rail (i.e., off the dock and
placed on the ship). The seller pays the cost of loading the goods.
This term is very similar to the ordinary F.O.B. term. The seller fulfills
its obligation by delivering the goods to the air carrier at the airport
of departure. The risk of loss is transferred from the seller to the buyer
at such time.
C & F
"C. & F." or "cost and freight" (also abbreviated
)CFR requires the seller to pay the costs and freight
necessary to bring the goods to the named destination, but the risk of
loss or damage to the goods, as well as any cost increases, are transferred
from the seller to the buyer when the goods pass the ship's rail in the
port of shipment. Insurance is the buyer's responsibility.
"C.I.F."-- meaning "cost, insurance, and freight"--is
C. & F. with the additional requirement that the seller procure transport
insurance against the risk of loss or damage to goods. The seller must
contract with the insurer and pay the insurance premium. Insurance is
generally more important in international shipping than domestic shipping,
because U.S. laws generally hold a common carrier to be liable for lost
or damaged goods.
CPT or Freight/Carriage Paid To
This term means the seller pays the freight for the carriage of the goods
to the named destination. The risk of loss or damage to the goods and
any cost increases transfers from the seller to the buyer when the goods
have been delivered to the custody of the first carrier, and not at the
ship's rail. Accordingly, "freight/carriage paid to" can be
used for all modes of transportation, including container or roll-on roll-off
traffic by trailers and ferries. When the seller is required to furnish
a bill of lading, way bill, or carrier receipt, the seller duly fulfills
its obligation by presenting such a document issued by the person contracted
with for carriage to the main destination.
CIP or Freight/Carriage and Insurance
This term is the same as "freight/carriage paid to" but with
the additional requirement that the seller has to procure transport insurance
against the risk of loss or damage to the goods during the carriage. The
seller contracts with the insurer and pays the insurance premium.
DES Ex Ship
"Ex ship" means the seller shall make the goods available to
the buyer on board the ship at the destination named in the sales contract.
The seller bears the full cost and risk involved in bringing the goods
there. The cost of unloading the goods and any customs duties must be
paid by the buyer.
DEQ Ex Quay
"Ex quay" means the seller has agreed to make the goods available
to the buyer on the quay or the wharf at the destination named in the
sales contract. The seller bears the full cost and risks in delivering
the goods to that point including unloading. There are two variations
of ex quay contracts: "ex quay duty paid" and "ex quay
duty on buyer's account." In the first, the duty is paid by the seller.
In the second, the duty also is paid by the seller, but the buyer must
reimburse the seller.
DAF or Delivered at Frontier
"Delivered at frontier" means that the seller's obligations
are fulfilled when the goods have arrived at the frontier but before the
customs border of the country named in the sales contract. The term is
primarily used when goods are carried by rail or truck. The seller bears
the full cost and risk in delivering the goods up to this point, but the
buyer must arrange and pay for the goods to clear customs.
DDP or Delivery/Duty Paid
"Delivery/duty paid" represents the seller's maximum obligation.
The term "DDP." is generally followed by words indicating the
buyer's premises. It notes that the seller bears all risks and all costs
until the goods are delivered. This term can be used irrespective of the
mode of transport. If the parties wish to make clear that the seller is
not responsible for certain costs, additional word should be added (for
example, "delivered duty paid exclusive of VAT and/or taxes").
DDU or Delivery Duty Unpaid
Delivered duty paid.
Under these terms, the seller fulfills his obligation to deliver when
the goods have been available to the buyer uncleared for import at the
point or place of the named destination. The seller bears all costs and
risks involved in bringing the goods to the point or place of named destination.
There is no obligation for import clearance.
For a more complete discussion of the various Incoterms
and their uses, the ICC Publishing Corporation, Inc., 156 Fifth Avenue,
Suite 820, New York, N.Y., publishes Incoterms (No. 350), which
discusses the actual ICC rules for the use of these terms, and The
Guide to Incoterms (No. 354), which provides illustrations and diagrams
clearly setting forth the responsibilities of the buyer and the seller
under each of the Incoterms.