INCO Terms

INCO terms are most commonly used in international contracts, and oftebned reflected on the sales invoice. The standard set of logistics sales terms ensures that buyers and sellers understand each other's expectations and responsibilities. The tersm were created by the ICC (International Chamber of Commerce). The terms are reviewed and updated every 10 years to keep pace with the ever-changing world of international trade and logistics. Note, these are standard terms only to indcated the rigths and duties of sellers and buyers in a trade contract, and may be superceded by a tradeing contract or conditions as agreed upion by the parties involved. Listed below are some of the main terms:

EXW Ex Works The seller's obligation is fulfilled when the buyer has been notified, and the goods (suitably packed) are available to the buyer, at the named place within the time specified. The buyer is responsible for all arrangements, customs clearance, costs and risks, including the loading of the goods from the named/specified point.

FCA Free Carrier Seller's obligation ends when he delivers the goods, cleared for export, to the carrier (any mode of transport) nominated by the buyer at the named place. The buyer must contract at his own expense the shipping/carriage of the goods from the named place. The buyer must clear the goods for import.

FOB Free On Board The seller's obligation is fulfilled when the buyer has been notified and the goods have passed over the ship's rail on board the vessel, at the named port. The buyer is responsible for all costs and risks associated with the goods after they have passed over the ship's rail and loaded on board the ship, at the named port. The seller is required to arrange for the export clearance of the goods. The buyer is responsible to arrange for the import clearance of the goods.

CFR Cost and Freight The seller's obligation is fulfilled when the goods are delivered to a carrier, pass the ship's rail, and the contract of carriage is arranged, freight prepaid, to the named port. The buyer is responsible for all risks associated with the goods after they have passed the ship's rail to be loaded on board the vessel, as well as the costs and risks related to the goods (receipt of the goods from the carrier) in the importing country. The seller is responsible to arrange for the transport and export clearance of the goods. The buyer is responsible for the import clearance of the goods.

CIF Cost, Insurance and Freight The seller's responsibility is fulfilled when the goods are delivered to a carrier, pass the ship's rail, the contract of carriage is arranged, freight prepaid, to the named port, and insurance is obtained on the cargo.The buyer is responsible for all risks associated with the goods after they have passed the ship's rail to be loaded on board the vessel, as well as the costs and risks related to the goods (receipt of the goods from the carrier) in the importing country. The seller is responsible for the export clearance of the goods, while the buyer is responsible for the import clearance of the goods.

CPT Carriage Paid To The seller's responsibility is fulfilled when the goods are delivered to a carrier, pass the ship's rail, the contract of carriage is arranged, freight prepaid, to the named place of destination. The buyer is responsible for all risks associated with the goods after they have been delivered to the named place of destination, as well as the costs and risks related to the goods (receipt of the goods from the carrier) in the importing country, including insurance. The seller is responsible for the export clearance of the goods, while the buyer is responsible for the import clearance of the goods.

CIP Carriage and Insurance Paid To The seller's obligation is fulfilled when the goods are delivered to a carrier, and the contract of carriage is arranged, freight prepaid - the named place of destination, and insurance is obtained on the cargo. The buyer is responsible for all costs and risks associated with the goods after receipt by the carrier - prior to loading on board the vessel or aircraft, as well as the costs and risks related to the goods (receipt of the goods from the carrier) upon arrival in the importing country. The seller is responsible for the export clearance of the goods, while the buyer is responsible for the import clearance of the goods.