Terms of Trade or Incoterms

1. Terms of Trade or Incoterms

2. When a Purchase Is Made Who Pays What? Export packing costs Inland transportation to port Export clearance International carrier loading Main transportation costs Cargo insurance Customs duties Risk in transit Click on “Page Down” to continue.

3. INternational Chamber Of COmmerce TERMS Export packing costs Inland transportation to port Export clearance International carrier loading Main transportation costs Cargo insurance Customs duties Risk in transit Click on “Page Down” to continue.

4. Incoterm Definition InternationalCommerceTerm • A formalized international Term of Trade regulated by the International Chamber of Commerce • Specifies the responsibilities of the exporter and the responsibilities of the importer in an international transaction • Which tasks will be performed by the exporter • Which tasks will be performed by the importer • Which activities will be paid by the exporter • Which activities will be paid by the importer • When the transfer of responsibility for the goods will take place • First codified by the International Chamber of Commerce in 1953. The latest revision is dated 2000 Click on “Page Down” to continue.

5. INCOTERMS CFR Delivered Ex Quay Delivered Ex Ship Delivered Ex Ship CFR Cost, Insurance, Freight Delivered Ex Ship Delivered Duty Unpaid Delivered Ex Ship Delivered Duty Unpaid Delivered Ex Ship Delivered Ex Ship Delivered Duty Unpaid CPT Delivered Ex Ship Delivered Duty Unpaid CIF Cost, Insurance, Freight Delivered Ex Ship CPT Delivered Ex Ship Delivered Duty Unpaid Delivered Ex Ship Delivered Ex Ship Delivered Duty Unpaid Cost, Insurance, Freight Delivered Ex Quay Delivered Duty Unpaid CPT Delivered Ex Ship Delivered Ex Ship Delivered Duty Unpaid CIF CIF EXW ? ? ? ? FCA CIF Carriage Paid To CIF EXW Delivered Duty Unpaid Delivered Ex Ship CIF Carriage Paid To EXW DDU CIF Delivered Ex Ship Carriage Paid To Carriage Paid To EXW DDU CIF Free Alongside Ship Free Alongside Ship Carriage Paid To EXW DDU CIF Carriage Paid To Free Alongside Ship Carriage Paid To Free Alongside Ship EXW DDU FOB Delivered Ex Ship CIF Free Alongside Ship Carriage Paid To EXW DDU Carriage and Insurance Paid To CIF Free Alongside Ship EXW CFR DDU Delivered Ex Ship Carriage and Insurance Paid To CIF Free Alongside Ship DEQ DDU CIF DAF Carriage and Insurance Paid To Delivered Ex Ship CIF Free Carrier Free Alongside Ship Free Carrier DDUv DES CPT Carriage and Insurance Paid To Free Alongside Ship DDU Carriage and Insurance Paid To Cost and Freight Ex Works Delivered Duty Unpaid Free Alongside Ship CPT Carriage and Insurance Paid To Free Alongside Ship Delivered Ex Quay Carriage and Insurance Paid To Free Alongside Ship Free Alongside Ship Delivered Duty Paid CIF Carriage and Insurance Paid To Free Alongside Ship Carriage and Insurance Paid To Delivered Duty Paid FAS Ex Works CIF CFR DDU Delivered Duty Paid Free Alongside Ship CIF Delivered Duty Unpaid Delivered Duty Paid Delivered Ex Quay Delivered Duty Unpaid Delivered Duty Paid DEQ Free On Board Delivered Duty Paid Carriage and Insurance Paid To DDP Delivered Ex Ship Delivered Duty Paid CIP CIF Carriage and Insurance Paid To Delivered at Frontier Delivered Duty Unpaid CPT Delivered Ex Ship

6. INCOTERMS • “E” Terms

7. INCOTERMS • “E” Terms. • “F” Terms.

8. INCOTERMS • “E” Terms. • “F” Terms. • “C” Terms.

9. INCOTERMS • “E” Terms. • “F” Terms. • “C” Terms. • “D” Terms.

10. INCOTERMS • “E” Terms.

11. INCOTERMS • “E” Terms.

12. INCOTERMS • “E” Term. • “Ex Works.”

13. INCOTERMS • “E” Term. • “Ex Works.” • Buyer pays everything.

14. INCOTERMS • “F” Terms.

15. INCOTERMS • “F” Terms. • Seller pays for product to be delivered, cleared for export, to carrier buyer selects.

16. INCOTERMS • “F” Terms. • Seller pays for product to be delivered, cleared for export, to carrier buyer selects. • “C” Terms.

17. INCOTERMS • “F” Terms. • Seller pays for product to be delivered, cleared for export, to carrier buyer selects. • “C” Terms. • Seller pays for main carriage and/or cargo insurance.

18. INCOTERMS • “F” Terms. • Seller pays for product to be delivered, cleared for export, to carrier buyer selects. • “C” Terms. • Seller pays for main carriage and/or cargo insurance. • “D” Terms.

19. INCOTERMS • “F” Terms. • Seller pays for product to be delivered, cleared for export, to carrier buyer selects. • “C” Terms. • Seller pays for main carriage and/or cargo insurance. • “D” Terms. • Seller pays all costs of delivery.

20. INCOTERMS • “E” Terms. • “Ex Works.” • Buyer pays everything.

21. Incoterms: EXW • Used with any merchandise or form of transportation. • Easiest Incoterm for exporter, most difficult for importer. • Basically, exporter says: “Here is product. Come get it.”

22. Seller Prepare order Mfg. Pick items Pack items Buyer

23. Seller Prepare order Mfg. Pick items Pack items Buyer Buyer pays: Export packing costs Inland transportation to port Export clearance International carrier loading Main transportation costs Cargo insurance Customs duties Risk in transit

24. Incoterms: FCA • “Free Carrier.” • For goods shipped multi-modal without handling. • Oriented toward containerization. • Exporter delivers goods to carrier that importer selects. • Responsibility shifts from exporter when goods are delivered to carrier’s vehicle, either at exporter’s plant or carrier’s premises.

25. Land Incoterm: DAF • “Delivered at Frontier.” • For any merchandise, but specifically refers to land transportation. • Transfer of responsibility from exporter to importer is at city named in Incoterm. • Usually goods remain on vehicle to final destination.

26. Ocean Incoterms • FAS: “Free Along Ship.” • Exporter brings goods to port. • At port, importer takes responsibility for goods. • FOB: “Free on Board” Port of Departure. • Exporter responsible for goods until they are on the ship, then importer is responsible. • Dividing point is ship’s rail.

27. OCEAN TERM: CFR “Cost and Freight” Exporter responsible for goods until on ship. CIF “Cost, Insurance and Freight” Same as CFR except exporter pays marine insurance. NON-OCEAN TERM: CPT “Carriage Paid To” Exporter responsible for goods until on carrier. CIP “Carriage and Insurance Paid to” Same as CIF except it’s a non-ocean shipment. Ocean and Corresponding Non-Ocean Incoterms

28. OCEAN TERM: CFR “Cost and Freight” Exporter responsible for goods until on ship. CIF “Cost, Insurance and Freight” Same as CFR except exporter pays marine insurance. NON-OCEAN TERM: CPT “Carriage Paid To” Exporter responsible for goods until on carrier. CIP “Carriage and Insurance Paid to” Same as CIF except it’s a non-ocean shipment. Ocean and Corresponding Non-Ocean Incoterms Click on “Page Down” to continue.

29. OCEAN TERM: DES “Delivered ex Ship” Exporter responsible or goods (usually bulk commodities) until importer gets them at port of destination. DEQ “Delivered ex Quay” Usually bulk commodities for which exporter pays for ship unloading. NON-OCEAN TERM: DDU “Delivered Duty Unpaid” Exporter performs most tasks in shipment except unloading costs. DDP “Delivered Duty Paid” Exporter pays for everything in the shipment. Ocean and Corresponding Non-Ocean Incoterms

30. OCEAN TERM: DES “Delivered ex Ship” Exporter responsible or goods (usually bulk commodities) until importer gets them at port of destination. DEQ “Delivered ex Quay” Usually bulk commodities for which exporter pays for ship unloading. NON-OCEAN TERM: DDU “Delivered Duty Unpaid” Exporter performs most tasks in shipment except unloading costs. DDP “Delivered Duty Paid” Exporter pays for everything in the shipment. Ocean and Corresponding Non-Ocean Incoterms Click on “Page Down” to continue.

31. Incoterms by Transport Mode

32. Incoterms by Transport Mode Click on “Page Down” to continue.

33. Incoterm STRATEGY • Incoterm determined by exporter’s strategy and… • Type of product. • Method of shipment. • Ability of both parties to perform tasks in shipment. • Trust parties have toward one another. • Exporter always chooses Incoterm.

34. End of Program