Incoterms Guide
Incoterms Guide
Incoterms (International Commercial Terms) are a set of globally recognised trade terms published by the International Chamber of Commerce (ICC). They define the responsibilities of buyers and sellers in international transactions, specifying who is responsible for shipping, insurance, customs duties, and risk at each stage of delivery.
Understanding Incoterms is essential when shipping goods internationally with ExpressRoad, as they determine cost allocation and liability between parties.
Group E — Departure
| Term | Full Name | What It Means |
|---|---|---|
| EXW | Ex Works | The seller makes goods available at their premises. The buyer bears all costs and risks of transport from that point forward, including export clearance. |
Group F — Main Carriage Unpaid
| Term | Full Name | What It Means |
|---|---|---|
| FCA | Free Carrier | The seller delivers goods to a carrier nominated by the buyer. Risk transfers once goods are handed to the carrier. The seller handles export clearance. |
| FAS | Free Alongside Ship | The seller delivers goods alongside the vessel at the port of shipment. Used for sea freight. Buyer bears costs and risk from that point. |
| FOB | Free on Board | The seller delivers goods on board the vessel. Risk transfers once goods pass the ship's rail. One of the most commonly used terms for sea freight. |
Group C — Main Carriage Paid
| Term | Full Name | What It Means |
|---|---|---|
| CFR | Cost and Freight | The seller pays for transport to the destination port, but risk transfers to the buyer once goods are loaded on the vessel. |
| CIF | Cost, Insurance and Freight | Same as CFR, but the seller also provides marine insurance. Very common for sea freight shipments. |
| CPT | Carriage Paid To | The seller pays freight to the named destination. Risk transfers when goods are handed to the first carrier. Suitable for all modes of transport. |
| CIP | Carriage and Insurance Paid To | Same as CPT, but the seller must also obtain insurance covering the buyer's risk during transit. |
Group D — Arrival
| Term | Full Name | What It Means |
|---|---|---|
| DAP | Delivered at Place | The seller delivers goods to an agreed destination, ready for unloading. The seller bears all risk and cost up to that point, but the buyer handles import clearance and duties. |
| DPU | Delivered at Place Unloaded | The seller delivers and unloads goods at the agreed destination. The only Incoterm requiring the seller to unload. |
| DDP | Delivered Duty Paid | The seller bears all costs and risks, including import duties and taxes, delivering goods cleared for import at the destination. Maximum obligation for the seller. |
Need help choosing the right Incoterm? ExpressRoad's team can advise on the most suitable terms for your shipment. Contact us for guidance.