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Incoterms
Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers in international trade. They clarify who handles shipping, insurance, duties, and risk at each step of the journey. Below is a short explanation of each term.
Group E – Departure
EXW
Ex Works
Buyer takes full responsibility from the seller’s premises. Seller doesn’t handle transport or export clearance.
Group F – Main Carriage Unpaid
FCA
FAS
FOB
Free Carrier
Free Alongside Ship
Free On Board
Buyer takes full responsibility from the seller’s premises. Seller doesn’t handle transport or export clearance.
Goods are placed next to the ship at the port. Buyer handles loading, sea freight, and further costs.
Seller loads goods on board the ship. Buyer takes over risk and cost once the goods are on the vessel.
Group C – Main Carriage Paid
CFR
CIF
CPT
CIP
Cost and Freight
Cost, Insurance and Freight
Carriage Paid To
Carriage and Insurance Paid To
Seller pays for transport to the destination port. Risk transfers once goods are on the ship.
Same as CFR, but seller also arranges marine insurance.
Seller pays to transport goods to the destination. Risk transfers when goods are handed to the carrier.
Like CPT, but seller also provides insurance during transit.
Group D – Arrival
DAP
DPU
DDP
Delivered At Place
Delivered at Place Unloaded
Delivered Duty Paid
Seller delivers goods to the buyer’s location, ready for unloading. Buyer handles import duties.
Seller delivers and unloads goods at the destination. Buyer handles import clearance.
Seller covers everything—including shipping, insurance, and import duties—until goods reach the buyer.
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