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INCO Terms – Everbridge Shipping LLC
INCO Terms

When negotiating an international sales contract the Terms of Sale can be just as important as the sale price. Language barriers could complicate this point. Since 1936 the INCO Terms created by the International Chamber of Commerce (ICC) have been used to breakdown these barriers.

INternational COmmerce Terminology (INCO Terms) defines exactly the shipping responsibilities of both the buyer and the seller. This table illustrates the cost responsibilities for each party –

EXW FCA FAS FOB CFR CIF (2) CPT (1) CIP (1) (2) DAT DAP DDP
Ex Works Free Carrier Free
Alongside
Ship
Free
Onboard
Vessel
Cost &
Freight
Cost,
Insurance &
Freight
Carriage
Paid To
Carriage &
Insurance
Paid To
Delivered
At Terminal
Delivered
At Place
Delivered
Duty Paid

SERVICES

Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays
Loading on Truck
(Carrier)
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Export-Customs
Declaration
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Carriage to Port
of Export
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Unloading of Truck in
Port of Export
Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller
Loading Charges in
Port of Export
Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller
Carriage to Port
of Import
Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller
Unloading Charges in
Port of Import
Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller
Loading on Truck in
Port of Import
Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller
Carriage to Place
of Destination
Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller
Insurance Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Seller Seller
Import Customs
Clearance
Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller
Import Taxes Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller
(1) Risk of loss or damage is transferred from Seller to Buyer when the goods have been delivered to the carrier.
(2) While the Seller is responsible for insurance coverage during the main voyage, the buyer may have additional 'insurable interest' and prudence may dictate purchase of additional coverage.
RULES FOR ANY MODE(S) OF TRANSPORT
THE SEVEN RULES DEFINED BY INCOTERMS 2010 FOR ANY MODE(S) OF TRANSPORTATION ARE:


EXW – Ex Works (named place of delivery)

The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller doesn’t load the goods on collecting vehicles and doesn’t clear them for export. If the seller does load the good, he does so at buyer’s risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.

RULES FOR SEA AND INLAND WATERWAY TRANSPORT
THE FOUR RULES DEFINED BY INCOTERMS 2010 FOR INTERNATIONAL TRADE WHERE TRANSPORTATION IS ENTIRELY CONDUCTED BY WATER ARE:


FAS – Free Alongside Ship (named port of shipment)

The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo.