What are Incoterms 2024? Simply explained!

• C-clauses, also known as "dispatch clause with assumption of costs by the seller":

  C-Incoterms are usually chosen when the seller assumes the transport costs up to the destination. The seller pays for the transport to a specific location, but the risk is transferred to the buyer as soon as the goods are handed over to the first carrier.

• D clauses, also known as "arrival clauses":

  These terms are beneficial when the seller covers the transport costs to the final destination. The responsibility and risk shift to the buyer once the goods reach their destination and are made available to them.

• E-clause EXW (Ex Works), also known as the "collection clause":

  EXW is the right choice if the buyer is to assume all costs and risks of transport from the seller's works. The buyer pays for everything from this point onwards and responsibility is transferred to the buyer as soon as the goods are ready for collection from the seller.

• F-clauses, also known as "despatch clause without assumption of costs by the seller":

  F clauses are ideal when the buyer is willing to take on the costs and risks of the main transport only. In this context, "Free" indicates that the buyer assumes the costs starting from a specific point, while the seller is responsible for the risk and costs leading up to that point.

• EXW (Ex Works)

The seller is responsible for making the goods available at their premises or another specified location (such as a factory, plant, or warehouse). From that point forward, the buyer assumes all associated costs and risks.

Example: A German machine manufacturer sells a machine to a company in Japan. The machine is made available at the seller's factory in Munich. The Japanese buyer must collect the machine and arrange transport to its location, including all transport, insurance and customs costs.

• FCA (Free Carrier)

The seller delivers the goods to a carrier named by the buyer or to another named place. The seller is responsible for customs clearance of the goods for export.

Example: A French wine producer ships wine to a US dealer. The wine is handed over to a carrier in Bordeaux, selected by the retailer. The wine producer is responsible for the costs and risks up until the handoff to the carrier, after which the responsibility shifts to the retailer.

• CPT (Carriage Paid To)

The seller pays the freight costs to the named destination. However, the risk is transferred to the buyer as soon as the goods have been handed over to the first carrier.

Example: An electronics manufacturer in China sells tablets to a retailer in Australia. The manufacturer pays the transport costs to the port in Sydney. However, the risk of loss or damage to the goods is transferred to the buyer at the port of Shanghai.

• CIP (Carriage and Insurance Paid To)

As CPT, but with the additional obligation of the seller to take out minimum insurance against loss or damage to the goods during transport.

Example: A furniture manufacturer in Italy sells a delivery of chairs to a customer in Canada. The manufacturer pays the freight and insurance costs to the destination in Toronto. The risk is transferred to the buyer as soon as the goods are handed over to the first carrier, but the seller provides insurance against possible damage.

• DAP (Delivered at Place)

The seller delivers the goods to a named place, without unloading. The seller bears all costs and risks up to this point.

Example: A mechanical engineering company in Germany sells a system to a customer in Brazil. The system is delivered to the customer's plant in São Paulo. The German seller assumes all transport costs and risks until the system arrives at the Brazilian customer's plant.

• DPU (Delivered at Place Unloaded)

The seller assumes the costs and risks until unloading at the named place. This is the only clause in which the seller is also responsible for unloading.

Example: A Spanish furniture manufacturer ships a large order to a retailer in London. The goods are transported to the retailer's warehouse in London and unloaded there. The Spanish manufacturer is responsible for all costs and risks until the goods are unloaded at the retailer's warehouse.

• DDP (Delivered Duty Paid)

The seller bears all costs and risks up to delivery at the named place, including customs clearance. The buyer only has to accept the goods.

Example: An electronics manufacturer in South Korea sells televisions to a retailer in Germany. The manufacturer assumes all costs and risks until the televisions are delivered to the retailer's warehouse in Berlin, including the payment of all customs duties and taxes.
 

Do you want to transport something? Discover our extensive range of transport services for companies: Find out more or simply write to us!
 

Rules for sea transport:

• FAS (Free Alongside Ship)

The seller delivers the goods alongside the ship at the port of shipment. From this point onwards, the buyer bears all costs and risks.

Example: A Canadian timber supplier sells timber to a customer in Spain. The timber is delivered alongside the ship at the harbour in Vancouver. The Spanish buyer assumes the costs and risks of transport from this point onwards.

• FOB (Free On Board)

The seller loads the goods onto the ship named by the buyer at the port of shipment. The risk is transferred to the buyer as soon as the goods are on board the ship.

Example: A Brazilian coffee supplier sells a large quantity of coffee to a trader in the USA. The coffee is loaded onto the ship designated by the US trader in the port of Santos. From this point onwards, the trader assumes all risks and costs.

• CFR (Cost and Freight)

The seller bears the costs and freight to the port of destination. However, the risk is transferred to the buyer as soon as the goods are on board the ship.

Example: An Indian textile manufacturer sells fabrics to a buyer in the UK. The manufacturer pays the transport costs to the port of Liverpool. However, the risk for the goods is transferred to the British buyer at the port of Mumbai.

• CIF (Cost, Insurance and Freight)

As CFR, but with the additional obligation of the seller to take out insurance. The seller bears the costs, freight and insurance up to the port of destination.

Example: A Japanese car manufacturer sells cars to a dealer in South Africa. The car manufacturer pays the transport and insurance costs to the port of Cape Town. However, the risk is transferred to the buyer as soon as the cars are on board the ship, but the seller provides insurance against possible damage.