INCO Definitions & Practical Applications

EXW - Ex Works
When the seller fulfills delivery for the usage of the buyer at the sellers’ location or other requested place of delivery when not cleared for export and not placed on any receiving, obligation for the seller is minimum but the buyer is responsible for all costs and risks.

FCA - Free Carrier
Seller fulfills delivery, cleared for export at requested location. If delivery occurs at sellers location, the seller is responsible for loading. If the delivery takes place at another location the seller has no responsibility for unloading.

Buyer must clear the goods for import.

FAS - Free Alongside Ship
Seller fulfills delivery, along side of the vessel at the designated port of shipment. The buyer is responsible for all costs and risk of loss, and damage to, the goods after that point in time. FAS requires the seller to perform all export clearance. FAS is referenced only for sea and inland waterway transportation.

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.

FOB - Free On Board
Seller fulfills delivery, when the goods cross the ship’s rail at the required port of shipment. The buyer is responsible for all costs and risk of loss of, or damage to, the goods after that point in time. FOB is referenced only for sea and inland waterway transportation.

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.

CFR - Cost and Freight
Seller fulfills delivery of the goods after they pass the ship’s rail at the required port of shipment. The seller is responsible for all of the freight to the required port of destination. Loss or damage to the goods along with any additional costs due to occurrences after time of delivery, transfer risk from the seller to the buyer. CFR is referenced only for sea and inland waterway transportation.

The seller is responsible for the clearance of the goods for export

The buyer is responsible for the import clearance of the goods.

CIF - Cost, Insurance and Freight
Seller fulfills delivery of the goods after they pass the ship’s rail at the required port of shipment. Any loss or damage to the goods along with any additional costs due to occurrences after time of delivery, transfer risk from the buyer to the seller. Also when referring to CIF, the seller is responsible for marine insurance against the buyers risk of loss of, or damage to the goods during shipment.

The seller is responsible for the clearance of the goods for export

The buyer is responsible for the import clearance of the goods.

CPT - Carriage Paid To
Seller fulfills delivery of the goods to the named carrier, but the seller also must bare the cost of carriage needed to bring the goods to the required destination. All risk other costs occurring upon delivery are the responsibility of the buyer. CPT necessitates the seller to clear the goods for export. CPT is referenced to regardless of the mode of transportation including multi-modal.

The seller is responsible for the clearance of the goods for export

The buyer is responsible for the import clearance of the goods.

CIP - Carriage and Insurance Paid To
Upon delivery of the goods to the named carrier, the seller is responsible for the cost of carriage to bring the goods to their destination. All risks and other costs of carriage necessary to bring the goods to their destination is the responsibility of the seller. Buyer is responsible for any risk or other costs after the goods have been delivered. Insurance against the buyers’ risk f damage to the goods during carriage is the responsibility of the seller. CIP is used regardless of the mode of transportation including multi-modal.

The seller is responsible to arrange for the pre-carriage and main carriage of the goods.

The seller is responsible for the clearance of the goods for export

The buyer is responsible for the import clearance of the goods.

DAF - Delivered At Frontier
The seller delivers the goods when they are at the disposal of the buyer on the arriving means of transport, not unloaded, cleared for export or import, at the point of destination and place at the frontier, but before the customs border at the adjoining country. Upon delivery of the goods to the named carrier, the seller is responsible for the cost of carriage to bring the goods to their destination. All risks and other costs of carriage necessary to bring the goods to their destination is the responsibility of the seller. Buyer is responsible for any risk or other costs after the goods have been delivered. Insurance against the buyers’ risk f damage to the goods during carriage is the responsibility of the seller. CIP is used regardless of the mode of transportation including multi-modal.

It is important that the frontier in question be defined so by naming that point in place in the DAF

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.

DES - Delivered Ex Ship
Upon delivery, the goods are now at the disposal of the buyer while on board the ship, not cleared for import and the understood port of destination and before discharge is the responsibility of the seller. DES is used when the delivery is by sea, inland waterway or multi-modal transport on a vessel in the port of destination.

The seller is responsible to arrange for the pre-carriage and main carriage of the goods.

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.

DEQ - Delivered Ex Ship
Upon delivery of the goods they are at disposal of the buyer not cleared for import on the port of destination. All the costs and risks involved in bringing the goods to the named port along with discharge of the goods is the responsibility of the seller. DEQ requires the buyer to clear the goods for import and pay for all formalities, duties, tours and other charges upon import. DEQ is referred to when goods are delivered by sea, inland waterway or multi-modal transport or discharging from a vessel onto the wharf of destination.

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.

DDU - Delivered Duty Unpaid
DDU is referred to when the goods are delivered to the buyer not cleared for import or unloaded from any arriving means of transport at the place of destination. All costs and risks involved in bringing the goods to other than where acceptable is the responsibility of the seller. DDU requires the buyer to clear the goods for import and pay for all formalities, duties, tours and other charges upon import. DEQ is referred to when goods are delivered by sea, inland waterway or multi-modal transport or discharging from a vessel onto the wharf 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.

DDP - Delivered Duty Unpaid
DDP is referred to when the delivery of the goods to the buyer, cleared for import or not unloaded from any arriving means of transport at the place of destination. All costs and risks involved in bringing the goods to their destination, where applicable, are the responsibility of the seller, along with any duty for import in the country of destination. DDP should not be used if the seller is unable to obtain the import license.

The buyer is responsible to take delivery of the goods from 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.