Incoterms 2000

Incoterms 2000 provides preambles explaining the function of each Incoterm. Here are concise definitions from the preambles

DDP - Delivered Duty Paid (named place of destination):

The seller delivers the goods when they are placed at the disposal of the buyer, cleared for import, and ready for unloading at the named place of destination. The seller bears all risks and costs, including duties, taxes, and other charges, up to the destination.

EXW - Ex Works (named place):

The seller delivers when they place the goods at the disposal of the buyer at the seller's premises or another named place (factory, warehouse, etc.). The seller does not bear any transportation costs or risks for the delivery of the goods to the destination.

FCA - Free Carrier (named place):

The seller delivers when they place the goods at the disposal of the carrier or another person nominated by the buyer at the named place. The seller is responsible for export clearance. The buyer bears all risks and costs from that point onwards.

FAS - Free Alongside Ship (named port of shipment):

The seller delivers when the goods are placed alongside the vessel at the named port of shipment. The buyer bears all costs and risks of loss or damage to the goods from that moment.

FOB - Free On Board (named port of shipment):

The seller delivers when the goods pass the ship's rail at the named port of shipment. The buyer bears all costs and risks of loss or damage to the goods from that point onwards.

CFR - Cost and Freight (named port of destination):

The seller delivers when the goods pass the ship's rail at the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination. However, the risk of loss or damage to the goods, as well as any additional costs due to events occurring after the goods have been delivered, are transferred from the seller to the buyer.

CIF - Cost, Insurance and Freight (named port of destination):

Similar to CFR, but the seller also has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The seller must pay the costs of insurance and freight necessary to bring the goods to the named port of destination.

CPT - Carriage Paid To (named place of destination):

The seller delivers when the goods are handed over to the carrier at the agreed place of shipment. The seller must pay the costs of carriage necessary to bring the goods to the named place of destination.

CIP - Carriage and Insurance Paid To (named place of destination):

Similar to CPT, but the seller also has to procure insurance against the buyer's risk of loss or damage to the goods during the carriage.

DAF - Delivered at Frontier (named place):

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport at the named place, cleared for export but not cleared for import. The seller bears all risks and costs up to the frontier.

DES - Delivered Ex Ship (named port of destination):

The seller delivers when the goods are placed at the disposal of the buyer on board the ship, not cleared for import at the named port of destination. The seller bears all risks and costs up to this point.

DEQ - Delivered Ex Quay (named port of destination):

The seller delivers when the goods are placed at the disposal of the buyer on the quay at the named port of destination, not cleared for import. The seller bears all risks and costs up to this point.

These examples demonstrate the correct use of Incoterms along with specific locations:

FCA Kuala Lumpur Incoterms 2000: This indicates that the seller is responsible for delivering the goods to the carrier or another person nominated by the buyer at a named place, which in this case is Kuala Lumpur. The risk and costs transfer from the seller to the buyer at this named place.

FOB Liverpool Incoterms 2000: Here, the seller's responsibility ends when the goods pass the ship's rail at the named port of shipment, which is Liverpool. The buyer assumes all risks and costs from that point forward.

DDU Frankfurt Schmidt GmbH Warehouse 4 Incoterms 2000 This signifies that the seller is responsible for delivering the goods to a named place, which is the specified warehouse in Frankfurt owned by Schmidt GmbH. The seller bears all costs and risks associated with transporting the goods to this destination, excluding import duties and taxes.

Incoterms