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Glossary of Terms and Abbreviations (Incoterms
1990)
Incoterms are a set of uniform rules codifying the interpretation
of trade terms defining the rights and obligations of both buyer
and seller in an international transaction, thereby enabling an
otherwise complex basis for a sale contract to be accomplished in
three letters.
INCOTERMS are designed to arrange for the transfer of responsibility
from seller to buyer at a convenient place where goods can be inspected.
Hence FOB, CFR (C&F) and CIF arrange for this to occur upon
loading on board the vessel. With container, inspection at shipside
is not possible, so that FOB, CFR etc. are inappropriate. The International
Chamber of Commerce (ICC) have, accordingly drafted three Combined
Transport equivalents, which they advise to use when availing of
Combined Transport services in order to avoid disputes. They are
FCA, CPT AND CIP which transfer responsibility from seller to buyer
at the inland point at which the carrier takes charge of the goods.
INCOTERMS can be divided into recommended usage by mode of carriage.
The division recommended by the ICC is:
All modes (i.e. combined transport)- EXW, FCA, CPT, CIP, DAF,
DDU, DDP.
Conventional port-to-port/sea carriage only - FAS, FOB, CFR, CIF,
DES, DEQ.
The terms set out hereunder are the INCOTERMS 1990:
| EXW |
 |
Ex works (named place) |
| FCA |
Free Carrier (named
place) |
| FAS |
Free Alongside Ship
(named port of shipment) |
| FOB |
Free On Board (named
port of shipment) |
| CFR |
Cost and Freight (named
port of destination) |
| CIF |
Cost, Insurance and
Freight (named port of destination) |
| CPT |
Carriage Paid To (named
point of destination) |
| CIP |
Carriage and Insurance
Paid To (named point of destination) |
| DAF |
Delivered At Frontier
(named point) |
| DES |
Delivered Ex Ship (named
port of destination) |
| DEQ |
Delivered Ex Quay (duty
paid) (named port of destination) |
| DDU |
Delivered Duty Unpaid
(named point) |
| DDP |
Delivered Duty Paid
(named point) |
Please click on the following links to view the shipping Terms/Abbreviations
and definitions in alphabetical order.
(Note: Links hereunder will direct you to
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