INCOTERMS 2010

What do the Changes Mean?

WHAT ARE INCOTERMS 2010?
Eleven (11) Incoterms 2010 (used to be 13 terms)
Four (4) terms were deleted and two (2) new terms were created
Incoterms 2010 will begin January 1, 2011, but you dont
have to use them on that date
Available worldwide through 100 International Chamber of
Commerce National Committees
The terms arent law; no laws that require their use and are not all
inclusive
Country neutral they dont favor one country over another
Self-contained all information that determines responsibility and
risk are in one place


PRACTICAL IMPACT OF CHANGE
New terms were effective
January 1, 2011
Old terms may apply to previously issued contracts
Make any necessary changes to standard contract
language and forms
Inform colleagues
CHANGESTHE BASICS
Two Categories of Terms
Rules for any mode(s) of transportation
Rules for sea and inland waterway
Removal of 4 terms
DAF, DES, DEQ, and DDU
Inclusion of 2 new terms
DAP and DAT
CHANGESTHE BASICS
Documentation requirements can be met with
equivalent electronic records
Provides for security-related requirements
Specifically addresses responsibility for terminal
handling charges
Allows for sellers in-transit sales to procure goods
shipped
CHANGESTHE TERMS
Simplification
Four categories reduced to two
13 terms consolidated to 11
TRANSPORTATION DEFINITIONS
Pre-carriage: inland transportation on the sellers side
Domestic: from the place where the shipment starts to any
subsequent transportation carriage
International: from the place where the shipment starts to the
departure point on the sellers side

Main Carriage:
Domestic: subsequent transportation beyond pre-carriage
International: transportation from the point of departure on
the sellers side to the arrival pint on the buyers side

On-carriage:
Domestic: subsequent transportation beyond main carriage
International: transportation from the arrival pint on the
buyers side
INCOTERMS 2000
THAT WAS THEN
EXW Ex Works
FCA Free Carrier
FAS Free Alongside Ship
FOB Free On Board
CRF Cost And Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid To
CIP Carriage and Insurance Paid To
DAF Delivered at Frontier
DES Delivered EX Ship
DEQ Delivered EX Quay
DDU Delivered Duty Unpaid
DDP Delivered Duty Paid
REMOVED FOUR AND ADDED TWO

REMOVED

DAF Delivered at Frontier
DES Delivered EX Ship
DEQ Delivered EX Quay

DDU Delivered Duty Unpaid

ADDED
DAT Delivered at Terminal
DAP Delivered at Place



INCOTERMS 2010
THIS IS NOW
EXW Ex Works
FCA Free Carrier
FAS Free Alongside Ship
FOB Free On Board
CFR Cost and Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid To
CIP Carriage and Insurance Paid To
DAT Delivered at Terminal
DAP Delivered at Place
DDP Delivered Duty Paid
INCOTERMS USED FOR ALL MODES
OF TRANSPORTATION

EX 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
INCOTERMS 2010 USED ONLY FOR
MARINE

FAS Free Alongside Ship
FOB Free On Board
CFR Cost and Freight
CIF Cost, Insurance and Freight
EXW - EX WORKS
Goods available only at sellers premises.
Buyer: loads the goods on truck or container at the
sellers premises, and takes into account the
subsequent costs and risks.
FCA - FREE CARRIER
Delivery at the specified point of departure: the sellers
premises or a named cargo terminal / railroad station
Buyer: main carriage/freight, cargo insurance and other
costs and risks
FAS - FREE ALONGSIDE SHIP
Seller: places the goods alongside the ship at the
named port, loaded at his expense.
Buyer: pays loading fee, main carriage/freight, cargo
insurance and other costs risks.
FOB - FREE ON BOARD
Delivery of goods on board the vessel at the port of
origin is at the sellers expense.
Buyer is responsible for loading fee, main
carriage/freight, cargo insurance and other costs
risks.

CFR - COST AND FREIGHT
Seller: pays the costs and freight to bring the
goods to the port of destination.
Risk: transferred once the goods have crossed the
ships rail.
CIF - COST INSURANCE AND FREIGHT
Used exactly the same way as CFR except that
Seller: must in addition procure and pay for insurance
for the cargo insurance and delivery of goods to the
port of destination
Buyer: responsible for the import customs clearance &
other costs and risks
CPT - CARRIAGE PAID TO
Seller delivers the goods at the named place of
destination at his expense.
Buyer assumes the cargo insurance, import customs
clearance, payment of customs duties and taxes,
and other costs and risks.
Risk transferred at the delivery of goods
CIP - CARRIAGE & INSURANCE PAID TO
Seller delivers the goods on the ship. On board, the
risk is transferred to the buyer.
Buyer is accountable for the import customs
clearance, payment of customs duties and taxes,
and other costs and risks until goods reach their
final destination.
DELIVERED AT TERMINAL (DAT)
(NAMED PLACE)
Named place at terminal on buyers side (a
terminal at the destination port or a terminal not
far beyond the destination port where its yet to
be cleared by Customs)
Seller arranges export clearance and delivers
goods export packed to the named destination
terminal, pays all transport costs thereto and
unloads
Buyer arranges import clearance and on
carriage
Transport Mode: All Modes
DELIVERED AT PLACE (DAP)
(NAMED PLACE)

Named place on buyers side
Seller arranges export clearance, delivers
export packed goods to the named place of
destination and pays all transportation costs
thereto
Buyer arranges import clearance and on
carriage
Transport mode: All Modes


DELIVERED DUTY PAID (DDP)
(NAMED PLACE)
Named place is on buyers side
Seller arranges export clearance, delivers
export packed goods cleared for import at the
named destination and pays all transportation
costs thereto
Buyer possibly responsible for unloading, on
carriage
Transport Mode: All Modes


Incoterm
2010
Export
customs
declaration
Carriage to
port of
export
Unloading
of truck in
port of
export
Loading on
vessel in
port of
export
Carriage
(Sea/Air) to
port of
import
Insurance
Unloading
in port of
import
Loading on
truck in port
of import
Carriage to
place of
destination
Import
customs
clearance
Import taxes
EXW Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FCA Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FAS Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FOB Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer
CPT Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer
CFR(CNF) Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer
CIF Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer
CIP Seller Seller Seller Seller Seller Seller Buyer/Seller Buyer/Seller Buyer Buyer Buyer
DAT Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer
DAP Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DDP Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Seller/Not
including
VAT/FAT