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Purpose |
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Are
also referred to as Terms of Sale and are standardized
trade definitions.
Most commonly used in international contracts, thus
reflected on the sales invoice.
Ensure buyers and sellers understand each other's
expectations and responsibilities.
Were created by the ICC (International Chamber of
Commerce, and are protected by ICC copyright.
Are reviewed every 10 years and regularly updated to
keep pace with the ever-changing world of international
trade.
Latest edition is the Incoterms 2000. |
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Contract of Carriage |
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The Incoterm utilized in a
transaction will dictate which party is responsible for
each transportation segment and it's corresponding
contract of carriage. The Incoterm that is utilized can
affect the title passage in foreign trade.
As a general rule, Pre-Carriage, Main-Carriage and
On-Carriage should be utilized in connection with the
Incoterms. |
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Contract of Carriage |
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Pre-Carriage: the
transportation segment from the seller's location to the
point where the cargo would leave from the seller's
side. Example, to arrange for pre-carriage, you
would contract with an inland carrier to make delivery
to a port or airport.
Main-Carriage: the transportation segment from the
seller's side to the buyer's side. Example, to arrange
for main-carriage, you would contract for ocean or air
carriage.
On-Carriage: the transportation segment from the point
of arrival (on the buyer's side), to the designated
ultimate receiver. Example, to arrange for
on-carriage, you would contract with an inland carrier
to make delivery from the port/airport of arrival to the
ultimate receiver. |
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13
Terms |
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EXW Ex Works (named place)
FCA Free Carrier (named place)
FAS Free Alongside Ship (named place)
FOB Free On Board (named port of shipment)
CFR Cost and Freight (named port of destination)
CIF Cost, Insurance and Freight (named port of
destination)
CPT Carriage Paid To (named place of destination)
CIP Carriage and Insurance Paid To (named place of
destination)
DAF Delivered at Frontier (named place)
DES Delivered Ex Ship (named port of destination)
DEQ Delivered Ex Quay (named port of destination)
DDU Delivered Duty Unpaid (named place of
destination)
DDP Delivered Duty Paid (named place of destination) |
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4
General Groups of Terms |
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E
term: seller's obligation (& control of shipment) is at
its minimum
F terms: require the seller to deliver the goods for
carriage as instructed by the buyer
C terms: require the seller to contract carriage on
usual terms at his own expense
D terms: seller's obligation & control at its
maximum |
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EXW Ex
Works |
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The seller's obligation is fulfilled
when the buyer has been notified, and the goods
(suitably packed for export) are available to the buyer,
at the named place within the time specified.
The buyer is responsible for all costs and risks,
including the loading of the goods from the
named/specified point.
The buyer is responsible to arrange the entire
contract of carriage of the goods (pre-carriage,
main-carriage, on-carriage).
The buyer is responsible for the export clearance of
the goods. This term should not be used when the buyer
cannot carrier out the export formalities directly or
indirectly.
The buyer is responsible for the import clearance of
the goods. |
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FCA
Free Carrier |
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Seller's obligation ends when they
delivers the goods, cleared for export, to the carrier
(any mode of transport) nominated by the buyer at the
named place.
The buyer must contract at his own expense the
carriage of the goods from the named place.
However, if it is requested by the buyer or if it is
commercial practice and they buyer does not give
instructions to the contrary in due time, the seller may
contract for carriage at the buyer's risk and expense.
Buyer must clear the goods for import. |
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FAS
Free Alongside Ship |
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Seller's obligation and risk to
deliver the goods alongside the vessel at the named port
of shipment.
Seller must clear the goods for export.
Term used for sea or inland waterway transport only.
Buyer is responsible for all costs and risks to
transport the goods to the destination once cargo is
delivered alongside the vessel.
Buyer bears all additional costs as a result of vessel
delay or refusal of goods for loading.
Buyer must clear the goods for import at final
destination. |
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FOB
Free On Board |
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The seller's obligation is fulfilled
when the buyer has been notified and the goods have
passed over the ship's rail on board the vessel, at the
named port. (technically, the seller would be
responsible for U.S. Terminal Handling when using this
term, so if the seller does not intend to deliver the
goods across the ship's rail, the FCA term should be
used)
The buyer is responsible for all costs and risks
associated with the goods after they have passed over
the ship's rail and loaded on board the ship, at the
named port.
The buyer is responsible to arrange for the carriage
of the goods from the named port of shipment (the
main-carriage and on-carriage).
The seller is required to arrange for the export
clearance of the goods.
The buyer is responsible to arrange for the import
clearance of the goods. |
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CFR
Cost and Freight |
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The seller's obligation is fulfilled
when the goods are delivered to a carrier, pass the
ship's rail, and the contract of carriage is arranged,
freight prepaid, to the named port.
The buyer is responsible for all risks associated with
the goods after they have passed the ship's rail to be
loaded on board the vessel, as well as the costs and
risks related to the goods (receipt of the goods from
the carrier) in the importing country.
The seller is responsible to arrange for the
pre-carriage and main-carriage of the goods.
The seller is responsible for the export clearance of
the goods.
The buyer is responsible for the import clearance of
the goods. |
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CIF
Cost, Insurance and Freight |
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The seller's responsibility is
fulfilled when the goods are delivered to a carrier,
pass the ship's rail, the contract of carriage is
arranged, freight prepaid, to the named port, and
insurance is obtained on the cargo.
The buyer is responsible for all risks associated with
the goods after they have passed the ship's rail to be
loaded on board the vessel, as well as the costs and
risks related to the goods (receipt of the goods from
the carrier) in the importing country.
The seller is responsible to arrange for the
pre-carriage and main-carriage of the goods.
The seller is responsible for the export clearance of
the goods.
The buyer is responsible for the import clearance of
the goods. |
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CPT
Carriage Paid To |
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The seller's responsibility is
fulfilled when the goods are delivered to a carrier,
pass the ship's rail, the contract of carriage is
arranged, freight prepaid, to the named place of
destination.
The buyer is responsible for all risks associated with
the goods after they have been delivered to the named
place of destination, as well as the costs and risks
related to the goods (receipt of the goods from the
carrier) in the importing country, including insurance.
The seller is responsible to arrange for the
pre-carriage and main-carriage of the goods.
The seller is responsible for the export clearance of
the goods.
The buyer is responsible for the import clearance of
the goods. |
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CIP
Carriage and Insurance Paid To |
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The seller's obligation is fulfilled
when the goods are delivered to a carrier, and the
contract of carriage is arranged, freight prepaid the
named place of destination, and insurance is obtained on
the cargo.
The buyer is responsible for all costs and risks
associated with the goods after receipt by the carrier
prior to loading on board the vessel or aircraft, as
well as the costs and risks related to the goods
(receipt of the goods from the carrier) upon arrival in
the importing country.
The seller is responsible to arrange for the
pre-carriage and main carriage of the goods.
The seller is responsible for the export clearance of
the goods.
The buyer is responsible for the import clearance of
the goods. |
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DAF
Delivered At Frontier |
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The seller's obligation ends when
they have delivered the goods to the disposal of the
buyer on the arriving means of transport not unloaded,
cleared for export, but not cleared for import and the
named point and place at the frontier but before the
customs border of the adjoining country.
The buyer is responsible for customs clearance,
duties, taxes, and delivery to final destination at the
country of import.
When delivery is to take place in the port of
destination, on board a vessel, or on the quay (wharf),
the DES or DEQ terms should be used. |
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DES
Delivered Ex Ship |
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The seller's obligation ends when
they have delivered the goods to the disposal of the
buyer on board the ship, cleared for export, but not
cleared for import but delivered the named port of
destination before discharging.
The buyer is responsible for customs clearance at the
country of import and all charges for discharging off
the ship (Destination Unloading, Terminal Handling
and/or Container Service Charges-CSC)
If the seller is also to be responsible for
discharging the goods off the ship, then the DEQ term
should be used. |
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DEQ
Delivered Ex Quay |
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The seller's obligation ends when they have
delivered the goods to the disposal of the buyer on
board the ship, cleared for export, but not cleared for
import but delivered the named port of destination after
discharging goods off the vessel at the quay (wharf).
The buyer is responsible to clear the goods for import
and pay for all formalities, duties, taxes, and other
charges upon import.
If the seller is also to be responsible for delivering
the goods past the quay to another place (warehouse,
terminal, etc.) in our outside the port, the DDU or DDP
terms should be used. |
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DDU
Delivered Duty Unpaid |
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The seller's obligation is fulfilled
when the goods have been made available to the buyer at
the named place of destination uncleared for
importation.
The buyer is responsible for all costs and risks
associated with the goods upon importation at the named
place of destination.
The seller is required to arrange for the entire
contract of carriage (pre-carriage, main-carriage,
on-carriage) to the named place of destination.
The seller is required to arrange for the export
clearance of the goods.
The buyer is responsible for the import clearance of
the goods, including the payment of any applicable
duties, taxes and fees. |
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DDP
Delivered Duty Paid |
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The seller's obligation is fulfilled
when the goods have been made available to the buyer at
the named place of destination cleared for
importation.
The buyer is responsible to take delivery of the goods
from the named place of destination.
The seller is required to arrange for the entire
contract of carriage (pre-carriage, main-carriage,
on-carriage) to the named place of destination.
The seller is required to arrange for the export
clearance of the goods.
The seller is required to arrange for the import
clearance of the goods, including the payment of any
applicable duties, taxes and fees. |
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INCO
Terms vs. Mode of Transport |
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Any Mode: EXW, FCA, CPT, CIP, DAF,
DDU, DDP
Maritime and inland waterways only: FAS, FOB, CFR,
CIF, DES, DEQ
Shapiro Mission Statement
It is the mission of Samuel Shapiro & Company, Inc. to
achieve, manage and deliver the highest quality of
personalized customer service in all facets of
international/domestic transportation and logistics. We
will utilize the knowledge of our skilled employees, our
three generations of experience, our expertise in
compliance, and our cutting-edge technological tools,
individually tailored to our client's needs, to achieve
this goal.
We will maintain the ethical and professional
standards established by Samuel Shapiro in 1915, and
strive to be a model corporate citizen. We will continue
to foster a culture of excellence among our employees,
always conscious of our responsibilities to our clients,
our Company philosophy, and the communities in which we
live. |
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Actual loading quantities subject to sample test.
Further information on request. |
