INCOTERMS are the rules created by ICC-International Chamber of Commerce, which determine the types of delivery in international trade. These rules regulate the expenses and responsibilities between the importer and exporter in international trade.
Types of Delivery/ Classification and Explanations
1- Types of Delivery Used for All Types of Transports
EXW – Ex Works
Delivery at the workplace of the exporter; It is the delivery of goods at the designated location such as the warehouse or factory of the exporter, with all expenses and risks belonging to the importer.
FCA – Free Carrier
Delivery to the Carrier; It is the delivery of goods to the carrier determined by the importer, at the designated location in exporter’s country.
CPT – Carriage Paid To
Delivery with its Freight Paid It is the delivery where the freight of the designated vehicle is paid by the exporter and insurance and other expenses belong to the importer.
CIP – Carriage and Insurance Paid To
Delivery with its Freight and Insurance Paid: It is the type of delivery where the exporter pays the freight and insurance expenses until the designated point in importer’s country.
DAT – Delivered at Terminal
Delivery at Terminal; It is the delivery of goods in importer’s country at the designated harbour/terminal by unloading from the vehicle, with all expenses and risks belonging to the exporter.
DAP – Delivered at Place
Delivery at the Designated Location; The goods are delivered in importer’s country and to the designated address, with all expenses paid except from taxes.
DDP – Delivered Duty Paid
Delivery with Customs Duties Paid It is the delivery of goods in importer’s country with all expenses and customs duties paid.
2 – Types of Delivery used at Sea and Inland Waters
FAS – Free Alongside Ship
Delivery near the Ship; It is the delivery of goods at the dock or loading area to be loaded onto the designated vessel.
FOB – Free on Board
Delivery at Ship (Shipboard); It is the type of delivery where the goods are loaded onto the designated vessel and costs and responsibilities such as carriage, insurance are handed over to the importer.
CFR – Cost and Freight
Delivery with the Freight Paid; It is the delivery where the freight of goods belonging to the vessel is paid by the exporter, and insurance and other expenses belong to the importer.
CIF – Cost, Insurance and Freight
Delivery with Expenses, Freight and Insurance Paid; It is the delivery of goods where the loading charges and the carriage cost until the designated delivery area in importer’s country and insurance expenses are paid.