Incoterms

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INCOTERMS 2010 -Summary

The INCOTERMS (International Commercial Terms) are international trade terms developed by the International Chamber of Commerce (ICC) with the objective to eliminate uncertainty of intent and obligation as to shipments between importers and exporters.

1.EXW   {+ the named place}
Ex Works

Ex means from. Works means factory, mill or warehouse, which are the seller’s premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.

In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee. In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio. The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.

SELLER’S RESPONSIBILITIES
Make goods available at the factory or depot for collecting by the buyer

BUYER’S RESPONSIBILITIES

Load goods onto a vehicle.
Transport the goods to their destination
Arrange all export and import procedures ( all documents)
Arrange insurance for the goods

RISK TRANSFER

All risk is with the buyer once the goods have been made available.

2.FCA   {+ the named point of departure}
Free Carrier

The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance centre. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

In the air shipment, technically speaking, goods placed in the custody of an air carrier are considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment. The term FCA is also used in the RO/RO (roll on/roll off) services. In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle. Recommended for all forms of transport and for multimodal transport.

SELLER’S RESPONSIBILITIES

Deliver the goods into the charge of the nominated carrier at the named place. If named place is seller’s premises, load goods in to vehicle. Clear goods for export.

BUYER’S RESPONSIBILITIES

If names place is not seller’s premises unload goods from the vehicle. Transport goods from named place to final destination, bearing all costs including any import duty. Clear goods for import.

RISK TRANSFER

Buyer assumes the risk once goods have been taken in charge by the carrier at the named place.

3.FAS   {+ the named port of origin}
Free Alongside Ship

Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at buyer's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks.

In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels. Appropriate for general bulk cargos, should not be used for containers- use FCA instead.

SELLER’S RESPONSIBILITIES

Delivers the goods to the berth or quay alongside the ship prior to main carriage. Clear goods for export

BUYER’S RESPONSIBILITIES

Load goods onto ship.
Transport goods from port of departure to final destination, bearing all costs including...
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