EXW – Ex Works (or EX Warehouse)

This term means that a seller makes goods available at its premises. The buyer has to clear them for export but has to bear all costs and risks involved in bringing them to the final destination.

FCA – Free Carrier

The FCA term does not state any responsibility for a seller. The goods are placed at the disposal of buyer at a named place (normally at his premises) and left there until he makes arrangements for their removal. The following must be specified in writing: name and address of seller, location where goods will be delivered to, date of delivery. According to Incoterms, with FCA the risk passes to buyer when goods have been made available at his premises. One exception is that if during transportation loss or damage occurs before loading or after unloading if sellers knew or ought to have known then Seller must bear responsibility.

FAS – Free Alongside Ship

Free alongside ship (FAS) indicates that a seller delivers when goods are placed alongside a vessel on its arrival in port. Payment is due upon delivery. Free on board (FOB) means that regardless of whether or not the title has passed to the buyer and/or transported away from the seller’s facilities, it will be delivered at buyer’s expense when goods pass over ship’s rail at the destination point. When FOB is used with CFR, it means that once goods have been received by an agreed carrier for shipment to a foreign country, legal title passes to buyer; risk transfers to the buyer once goods are received by an agreed carrier for shipment to a foreign country.

FOB – Free On Board

This is one of four ‘terms of delivery’ that you might see when doing business internationally. FOB simply means that responsibility for delivering and loading a shipment transfer to the buyer when it is put on board (and usually paid for) by either its agent or carrier (but not necessarily both). The risk of loss or damage to a shipment only passes from seller to buyer once it has been delivered on board (FOB). Under a FOB contract, a buyer purchases goods and then assumes all financial risks in transferring them. It’s very similar to CIF, with two key differences: who pays for freight and who assumes liability for damaged or lost goods.

CFR – Cost & Freight

With CFR (Cost & Freight), you must pay all transportation costs and duties upfront. This can be a good option for importers who have their own forwarders to handle freight. The trade-off is that it’s more expensive than other options like FOB (Freight on Board) because you’re covering all import costs upfront. If your order is particularly large or heavy, then you might be able to negotiate a price break using CFR in lieu of FOB, but otherwise expect to see a substantial increase in your order cost under CFR.

CIF – Cost, Insurance & Freight

The term CIF is defined in Incoterms 2010 as the seller fulfills his obligation to deliver when he has handed over the goods, cleared for export, into the charge of carrier at destination. Cost and freight refers to a mode of transportation in which an exporter delivers goods at an agreed port of exit. Freight is payable by the importer and charges include freight, insurance and other expenses (such as terminal handling charges). The exporter arranges and pays for export clearance and transport.

CPT – Carriage Paid To

This rule tells us that a seller has to bear all costs and risks for delivering goods to an agreed place (named place of destination or named place of origin) that is situated in a country in which he/she has effective control over. The risk passes when goods have been delivered. The seller will not be responsible for any loss or damage resulting from unusual circumstances beyond his/her control unless it is specifically provided for in writing by parties before a contract of sale is made. In addition, if the buyer fails to take delivery of goods at time and place agreed upon by contract of sale and as long as there are no abnormal reasons beyond his/her control, then the risk passes on to buyer when notice concerning readiness for delivery is given.

DAT – Delivered At Terminal

DAT means that a seller has delivered when it has put goods into its own or someone else’s custody at an agreed place in the country of importation. This term is used for both import and export sales and means that clearing formalities, including customs clearance, have been completed. The carrier delivers to a named terminal at which loading is arranged by agreement with an agent of either buyer or seller.The seller bears all risks as well as costs from handing over responsibility for goods to a carrier at DAT (also called CIP). In other words, once DAT appears on your cargo release bill – you can’t claim anything!

DAP – Delivered At Place (or Delivered At Frontier)

If DAP is specified in your contract of sale, then it means that you are responsible for the delivery of your goods and you must deliver them at a place that is agreed upon in writing between you and your buyer. You’re also required to cover any costs involved with delivering your goods to that agreed-upon location. If a specific price isn’t mentioned in your contract of sale (which would fall under EXW), then you must still bear the cost of delivering your goods to an agreed-upon location but those costs don’t have to be covered by any specific amount. This shipping option comes with free on board responsibilities as well.

DDP – Delivered Duty Paid (or Delivered Duty Unpaid)

Under DDP terms, a seller pays for shipping and insurance costs to get goods delivered to a named place in their destination country. This means that buyers must clear customs before taking possession of their purchase (where applicable), because they’re legally responsible for any import duties and taxes upon arrival. This term is mostly used when shipping internationally by sea or air freight. It’s more common with commercial shipments than private ones.

CIP-Carriage and Insurance Paid To

Under CIP terms, you (the seller) are responsible for everything until your goods arrive at their destination. You’re also responsible for any damage caused to them from that point onward. Typically used when shipping within your own country; also known as Free Carrier. The trade-off is that you don’t have to pay for shipping or insurance up front. Note: carriage is a British term and in most of today’s commercial parlance means transportation. In other words: no difference between CIP and CFR (Carriage Free Reception).

DPU-Delivered at Place Unloaded

This means that once your goods have arrived at their destination, you must take care of unloading them and getting them to your place of business or residence. The seller is responsible for properly packaging and insuring their products against damages incurred during shipping. If you don’t have any facilities for storage or handling of these products at your location, you’ll need to purchase a storage space to fulfill DAP requirements. You should also cover costs for custom duties and transport trucks if needed. For small businesses with limited resources, sellers may choose not to use DAP as a cost-cutting measure; instead using DDU (Delivered Duty Unpaid). This leaves it up to you as the buyer to handle all transportation costs after delivery but before receipt—saving yourself some cash along the way.