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INCOTERMS are the rules which were formed by ICC-International Chamber of Commerce and which determine the types of delivery in international trade. These rules regulate the costs and responsibilities in international trade between the exporter and importer. 

Types of Delivery /Classification and Explanations 

1 – Types of delivery used for all kinds of transportation 

EXW – Ex Works

Ex-work/ Delivery at exporter’s work place: Delivery of the goods on the exporter’s warehouse or factory where all costs and risks belong to the importer.

FCA – Free Carrier

Free Carrier; Delivery of the goods to the forwarder which was determined by the importer at the specified place in the exporter’s country.

CPT – Carriage Paid To

Carriage Paid to   Delivery of the goods where the transportation charges (freight) are paid by the exporter whereas insurance and other charges are undertaken by the importer.

CIP – Carriage and Insurance Paid To

Carriage  and Insurance Paid to ;  Delivery of the goods in which the transportation charge and insurance costs are paid by the exporter up to a certain point specified in the importer’s country. 

DAT – Delivered at Terminal

Delivered at Terminal; Delivery of goods by unloading them at a port/terminal specified in the importer’s country whereas all cost and risks belong to the exporter.

DAP – Delivered at Place

Delivered at Place; Delivery of goods   to a specific location in the importer’s country as all charges have been paid except taxes.

DDP – Delivered Duty Paid

Delivered Duty Paid; Delivery of goods in the importer’s country as all expenses and customs duties have been paid.

2 – Types of delivery at the sea and territorial seas 

FAS – Free Alongside Ship

Free alongside ship ; Delivery of goods at the port or loading area so as to be loaded into the specified vessel.

FOB – Free on Board

Free on Board; Delivery of goods by loading  them into a specific vessel, where  costs and responsibilities such as transportation and  insurance are transferred to the importer.

CFR –   Cost and Freight

Cost and Freight; Delivery of goods of which the transportation cost(freight) for the specific vessel has been paid by the exporter whereas insurance other costs shall belong to the importer. 

CIF – Cost, Insurance and Freight

Cost, Insurance and Freight;  Delivery of goods in which loading expenses  and the transportation fee and insurance charges up to the specific delivery point in the importer’s country have been paid .