Incoterms 2020
Incoterms (International Commercial Terms) are international rules published by the International Chamber of Commerce (ICC) that define the responsibilities of the buyer and the seller in an international sale transaction.
Choosing the right Incoterm helps avoid misunderstandings and unexpected costs related to transport, customs or insurance.
¿What do they define?
– The point of delivery of the goods.
– Who bears the costs of transport, insurance and customs clearance.
– The exact moment when risk is transferred from the seller to the buyer.
– The documentary obligations of each party (B/L, customs clearance, insurance, etc.).
Valid Incoterms
FAS (Free Alongside Ship)
The seller delivers the goods alongside the vessel at the port of shipment. The buyer assumes the risk and costs from that point onward.
FOB (Free on Board)
The seller delivers the goods on board the vessel. From that moment, the risk and costs are borne by the buyer.
CFR (Cost and Freight)
The seller covers the cost of transport to the port of destination, but the risk passes to the buyer once the goods are on board the vessel.
CIF (Cost, Insurance, and Freight)
Similar to CFR, but it includes insurance covering risks during maritime transport to the port of destination.
EXW (Ex Works)
The buyer assumes all costs and risks from the seller’s premises. It is the term with the least responsibility for the seller.
FCA (Free Carrier)
The seller delivers the goods to the carrier at an agreed point, such as a warehouse or terminal.
CPT (Carriage Paid To)
The seller covers the main transport to the agreed destination, but the risk passes to the buyer once the goods have been delivered to the carrier.
CIP (Carriage and Insurance Paid To)
Similar to CPT, but the seller also arranges insurance with minimum coverage.
DAP (Delivered At Place)
The seller delivers the goods at the agreed place, assuming the costs and risks up to that point, but not including customs clearance.
DPU (Delivered at Place Unloaded)
The seller assumes the costs and risks until the goods are delivered unloaded at the agreed place. It is the only Incoterm that includes unloading.