Allocations of costs to buyer/seller according to Incoterms 2010[edit]

Unloading Loading Carriage

Export
Carriage
Unloading in Loading on Carriage to Import
Incoterm
of truck in on vessel (Sea/Air)
customs to port of
Insurance
port of
truck in port place of
customs
2010
port of
in port of to port of
declaration export
import
of import destination clearance
export
export
import
EXW
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FCA
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FAS
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FOB
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
CPT
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
CFR(CNF)
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
CIF
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
CIP
Seller
Seller
Seller
Seller
Seller
Seller Buyer/Seller Buyer/Seller
Buyer
Buyer
DAT
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
DAP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
DDP

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Import
taxes
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Seller/Not
including
VAT/

Incoterms in Government Regulations[edit]

In some jurisdictions, the duty costs of the goods may be calculated against a specific Incoterm (for example in India, duty is calculated against
the CIF value of the goods, and in South Africa the duty is calculated against the FOB value of the goods). Because of this it is common for
contracts for exports to these countries to use these Incoterms, even when they are not suitable for the chosen mode of transport. Care must be
exercised to ensure that the liability issues are addressed by negotiation with the customer.

General Transport[edit]

EXW Ex Works (named place)[edit]

The seller makes the goods available at his/her premises. This term places the maximum obligation on the buyer and minimum obligations on the
seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a
buyer incurs the risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and does not
clear them for export. If the seller does load the goods, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading
of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in
the contract of sale.
The buyer arranges the pickup of the freight from the supplier's designated ship site, owns the in-transit freight, and is responsible for clearing
the goods through Customs. The buyer is also responsible for completing all the export documentation.
These documentary requirements may cause two principal issues. Firstly, the stipulation for the buyer to complete the export declaration can be
an issue in certain jurisdictions (not least the European Union) where the customs regulations require the declarant to be either an individual or
corporation resident within the jurisdiction. Secondly, most jurisdictions require companies to provide proof of export for tax purposes. In an ExWorks shipment the buyer is under no obligation to provide such proof, or indeed to even export the goods. It is therefore of utmost importance
that these matters are discussed with the buyer before the contract is agreed. It may well be that another Incoterm, such as FCA seller's premises,
may be more suitable..

FCA - Free Carrier (named place of delivery)[edit]

The seller delivers the goods, cleared for export, at a named place. This can be to a carrier nominated by the buyer, or to another person
nominated by the buyer.
It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery
occurs at the seller's premises, the seller is responsible for loading the goods on to the buyer's carrier. However, If delivery occurs at any other
place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both
unloading the goods and loading them on to their own carrier.

CPT Carriage Paid To (named place of destination)[edit]

CPT replaces the venerable C&F (cost and freight) and CFR terms for all shipping modes outside of non-containerised seafreight.
The seller pays for the carriage of the goods up to the named place of destination. Risk transfers to buyer upon handing goods over to the first
carrier at the place of shipment in the country of Export. The Shipper is responsible for origin costs including export clearance and freight costs
for carriage to named place (usually a destination port or airport). The shipper is not responsible for delivery to the final destination (generally
the buyer's facilities), or for buying insurance. If the buyer does require the seller to obtain insurance, the Incoterm CIP should be considered.

CIP Carriage and Insurance Paid to (named place of destination)[edit]

This term is broadly similar to the above CPT term, with the exception that the seller is required to obtain insurance for the goods while in
transit. CIP requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses of the
Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same
currency as the contract.
CIP can be used for all modes of transport, whereas the equivalent term CIF can only be used for non-containerized seafreight.

DAT Delivered at Terminal (named terminal at port or place of destination)[edit]

This term means that the seller covers all the costs of transport (export fees, carriage, unloading from main carrier at destination port and
destination port charges) and assumes all risk until destination port or terminal. The terminal can be a Port, Airport, or inland freight interchange.
Import duty/taxes/customs costs are to be borne by Buyer.

DAP Delivered at Place (named place of destination)[edit]

Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for
delivering the goods, ready for unloading from the arriving conveyance, at the named place. Duties are not paid by the seller under this term (an
important difference from Delivered At Terminal DAT, where the buyer is responsible for unloading).

DDP Delivered Duty Paid (named place of destination)[edit]

Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the
destination including import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-Incoterm
"Free In Store (FIS)". This term places the maximum obligations on the seller and minimum obligations on the buyer. With the delivery at the
named place of destination all the risks and responsibilities are transferred to the buyer and it is considered that the seller has completed his
obligations [5]