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INCOTERMS 2010

Many of you may be aware that the International Chamber of Commerce (ICC) recently completed a review of
Incoterms 2000. As a result of this review Incoterms 2010 will be come into effect on 1st January 2011. There is
no phase in period.

There have been some changes and these have been summarised below. We encourage all clients to review their
current agreements with their buyers and sellers to ensure they understand the risks associated with their
current terms. Incoterms are designed to specify which party has the obligation to make carriage or insurance
arrangements and which costs each party are responsible for. Incoterms do not cover the transfer of ownership
of goods or the consequences of a breach of contract. These matters are normally dealt with by the contract of
sale or in the law governing that contract.

Main Features of Incoterms 2010

1. Two new Incoterms DAT and DAP have replaced DAF, DES, DEQ and DDU
2. Incoterms can be used for specified modes of transport.
3. Named place of delivery, named place of destination, named terminal at port or place of destination,
named port of shipment, named port of destination

The Incoterm DDU is the most commonly used Incoterm from the terms that have been replaced. We
recommend that you now use the DAP term. DAP or Delivered at Place should be stipulated along with the named
place of destination. For example “DAP Melbourne including customs clearance and delivery but excluding
customs duties and taxes”

The following Incoterms can be used for all modes of transport: EXW – Ex works, FCA – Free Carrier, CPT –
Carriage Paid to, CIP Carriage and Insurance Paid to, DAT – Delivered at Terminal, DAP – Delivered at Place, DDP –
Delivered Duty Paid.

The following Incoterms can be used for Sea and Inland Waterway Transport; FAS – Free Alongside Ship, FOB –
Free on Board, CFR – Cost and Freight, CIF – Cost Insurance and Freight.

Named Place of Delivery etc are now important additives when stipulating Incoterms. Specifying the “named
place of Delivery“will ensure risks are passed on at the time you expect them to.

Further information can be found at the ICC website: http://www.iccwbo.org/incoterms/ or by contacting our
office.

Many of you will have a good relationship with your buyers / suppliers and we expect few changes will need to be
made. However for new relationships or large shipments we encourage all clients to check the Incoterms being
used to ensure risk is not being transferred to you prior to your expectations. Below is a quick reference guide to
help understand who is responsible for components of the movement of freight.
RULES FOR ANY MODE OF TRANPORT
EXW FCA CPT CIP
EX-WORKS FREE CARRIERS CARRIAGE PAID TO CARRIAGE &
ACCEPTANCE INSURANCE PAID TO
Cartage from Shipper Consignee Consignee Shipper Shipper
Warehouse Storage & Labour at Origin Consignee Shipper Shipper Shipper
Export Packing & Loading Charges Consignee Shipper Shipper Shipper
Forwarders Fees at Origin Consignee Shipper Shipper Shipper
Customs Charges at Origin Consignee Consignee Shipper Shipper
Terminal & Loading Charges at Origin Consignee Consignee Shipper Shipper
Freight from Port to Port Consignee Consignee Shipper Shipper
Terminal Charges at Destination Consignee Consignee Shipper Shipper
Forwarders Fees at Destination Consignee Consignee Shipper Shipper
Customs Clearance Fee Consignee Consignee Shipper Shipper
Duties & Taxes Consignee Consignee Consignee Consignee
Delivery to Consignee Consignee Consignee Consignee Consignee

RULES FOR ANY MODE OF TRANSPORT


DAT DAP DDP
DELIVERED AT DELIVERED AT DELIVERED DUTY
TERMINAL PLACE PAID

Cartage from Shipper Shipper Shipper Shipper


Warehouse Storage & Labour at Origin Shipper Shipper Shipper
Export Packing & Loading Charges Shipper Shipper Shipper
Forwarders Fees at Origin Shipper Shipper Shipper
Customs Charges at Origin Shipper Shipper Shipper
Terminal & Loading Charges at Origin Shipper Shipper Shipper
Freight from Port to Port Shipper Shipper Shipper
Terminal & Unloading at Destination Shipper Consignee Shipper
Forwarders Fees at Destination Shipper Consignee Shipper
Customs Clearance Fee Consignee Consignee Shipper
Duties & Taxes Consignee Consignee Shipper
Delivery to Consignee Consignee Consignee Shipper

RULES FOR SEA & INLAND WATERWAY TRANSPORT


FAS FOB CFR CIF
FREE ALONGSIDE FREE ON BOARD COST & FREIGHT COST, INSURANCE &
SHIP FREIGHT

Cartage from Shipper Shipper Shipper Shipper Shipper


Warehouse Storage & Labour at Origin Shipper Consignee Shipper Shipper
Export Packing & Loading Charges Shipper Consignee Shipper Shipper
Forwarders Fees at Origin Consignee Consignee Shipper Shipper
Customs Charges at Origin Shipper Consignee Shipper Shipper
Terminal & Loading Charges at Origin Consignee Consignee Shipper Shipper
Freight from Port to Port Consignee Consignee Shipper Shipper
Terminal & Unloading at Destination Consignee Consignee Consignee Consignee
Forwarders Fees at Destination Consignee Consignee Consignee Consignee
Customs Clearance Fee Consignee Consignee Consignee Consignee
Duties & Taxes Consignee Consignee Consignee Consignee
Delivery to Consignee Consignee Consignee Consignee Consignee

*** PLEASE NOTE THE TERMS DAF, DES, DEQ, DDU HAVE ALL BEEN REMOVED ***