+975 - 2 - 333327 / 327828 / 334422
Mon: 9AM TO 5.00PM, Sat : 9AM TO 1.00PM
INCO Terms
What are Incoterms?
Incoterms (International Commercial Terms) are an internationally recognized set of instructions used in the global transportation of goods. They define the division of responsibility between the Shipper (usually the supplier/consignor) and the Consignee (usually the buyer).
The terms dictate which party is responsible for the risks, costs and liabilities associated with the shipment at each stage of the shipping process.
Understanding Incoterms (International Commercial Terms) such as FOB, CIF and EXW is not always easy when trying to determine what’s best, so we’ve created this simple guide to help you understand what each Incoterm means so you can negotiate the best terms with your supplier.
EWX terms indicate that the buyer is responsible for collecting the goods from the seller and accepts all onward arrangements, including associated costs, risks and liabilities.
FOB (Free On Board)
FOB terms indicate that the seller and the buyer have fairly equal responsibility for all costs, risks and liabilities associated with transporting the goods. The seller is responsible up to the arrival to board the ship, including charges at the loading port. The buyer is responsible from loading onwards, until the goods reach their final destination. FOB is usually the recommended option for importers and buyers, as it allows greater control over costs.
CIF (Cost, Insurance and Freight)
CIF terms indicate that seller’s responsibility for the cost of shipping, freight charges, and insuring the cargo being shipped via ocean or inland till buyer’s address. Cost of shipping may escalate due to multiple agents involved.
DAP (Delivered at Place)
DAP terms indicates thatthe buyer is responsible for unloading the goods at the named place of delivery. Buyer assumes responsibility from the point of unloading the goods, including import customs clearance, duties and taxes. Can be used for all modes of transport.
DDP (Delivered Duty Paid)
A term indicating that the shipper/consignor is responsible for paying all duties and taxes at the agreed delivery point.
DDP terms indicate that the seller is responsible for carriage and delivery to a named place, including clearing for import and all applicable taxes and duties. Can be used for all modes of transport. They maximize cost and risk for a seller, and minimize them for the buyer. The buyer’s responsibility for the goods begins when they receive them for unloading at destination.
