What are Incoterms?
INCOTERMS are a set of terms of trade represented by three letters, commonly used in international contracts for sale of products. It is essential that you be aware of your terms of trade prior to the shipment, as these define the responsibility of each party in international logistics.
The definitions below are in accordance with the Incoterms® 2010 convention.
EXW (EX Works)
The seller makes the goods available at their premises.
FCA (Free Carrier)
The exporter delivers the goods cleared for export to a carrier at the place indicated by the importer.
CPT (Carriage Paid To)
This condition indicates that the exporter must pay for cargo’s shipping costs and international freight to the designated place of destination.
CIP (Carriage & Insurance Paid)
The exporter, in addition to paying the shipping fees and freight to the place of destination, also pays for transport insurance up to the place of destination indicated.
DAT (Delivered at Terminal)
The goods are placed at disposal of the buyer (importer) not cleared for import at a port terminal, or at a warehouse outside the destination port.
DAP (Delivered at Place)
As mercadorias poderão ser postas à disposição do comprador (importador) no porto de destino ainda no interior do navio transportador e antes do desembaraço para a importação.
DDP (Delivered Duty Paid)
The exporter is responsible to delivering the goods, clearing customs for import, at the place designated by the importer, paying all expenses, including taxes and other import charges.
FAS (Free Alongside Ship)
The exporter’s obligations end by placing the goods cleared for export, at the port, alongside the ship.
FOB (Free on Board)
The exporter must deliver the goods on board of the vessel indicated by the importer at the port of origin.
CFR (Cost & Freight)
The exporter must deliver the goods to the port of destination chosen by the importer. The transport costs are therefore the exporter’s.
CIF (Cost Insurance & Freight)
Similar to CFR, but the insurance costs are the exporter’s responsability.