Incoterms Logistics

Incoterms Logistics

EXW - Ex Works

» Merchandise is delivered to the buyer in the seller's establishment;

» Merchandise is placed in seller´s premises or another agreed location (factory, warehouse, etc.) for the buyer to take. The Merchandise is not documented for exportation and is not loaded in any type of vehicle;

» This category imposes minimum responsibility to the seller. The buyer is to cover all risks and costs involved in taking the merchandise from the seller´s location;

» Unless it could be found an explicit clause in the contract, risks and costs involved during the carrying operation at the seller´s location till shipping may be assigned to the seller;

» EXW can not be used if the buyer is in no condition to assume direct or indirect responsibility for the exportation formalities;
This category can be used in any type of transportation.

FCA - Free Carrier
» Merchandise delivered to an international carrier that is chosen by the buyer;

» The seller complies its responsibility when the merchandise is finally delivered for export and to the care of the buyer-assigned international carrier at the agreed location;

» From that moment on, the seller is no longer responsible for the risks and costs associated with the merchandise. Now the buyer must assume these risks and costs; this is, the buyer is responsible for all the costs associated to it, as well as any damaged or lost related to the merchandise;

» The chosen location of delivery is very important when defining responsibilities in loading and unloading activities from vehicles. If the delivery occurs in the seller´s premises, the seller is responsible for the safe loading of the merchandise to the buyer´s vehicle. If the merchandise is delivered in an agreed location but not in the seller´s location, the seller will not be responsible about the unloading of its vehicle;

» The buyer is free to designate a different person from the carrier to receive the merchandise. In that case, the seller is free of responsibility when the goods are delivered satisfactorily to that person;

This category can be used in any transportation type.

FAS - Free Alongside Ship
» The seller fulfills satisfactorily its responsibility when the goods are completely unloaded and placed alongside the freight ship, on unloading platforms or on ships employed to load the goods to the designated shipping port;

» From that moment on, the buyer assumes responsibility, risks and associated costs with the goods, including freights, insurance and other expenditures;

» The seller is responsible to all the documentation of the goods and all paperwork necessary for its exportation;

This category can only be used for maritime transportation (including through rivers and lakes).

FOB - Free On Board
» The seller fullfills its responsibility at the moment the goods trespass the ship´s rail at the designate shipping port. Henceforth the buyer assumes all responsibilities with the merchandise in terms of losses or damages to it;

» Delivery is completely accomplished on board the shipping boat designated by the buyer when all expenditures are covered by the buyer;

» The seller must provide all the documentation necessary for the exportation of the goods;

This category can only be used for maritime transportation (including through rivers and lakes).

CFR - Cost and Freight
» The seller contracts the transportation, assuming no risks from lost or damaged merchandise and no additional costs from further occurrences to the shipment;

» The seller is responsible for the payment of the loading operation on board the shipping boat;

» The seller is responsible to pay the freight cost until the agreed destination port;

» The seller must prepare the documentation necessary for the exportation of the goods;

» All risks, regarding lost or damaged merchandise and any other associated costs are transferred from the seller to the buyer at the moment the goods trespass the shipping boat´s rail;

» In case the buyer needs additional coverage of risks, it must contract and pay for a suitable insurer to protect its merchandise;

This category works exclusively in maritime transportation (including navigation through rivers and lakes).

DDP - Delivered Duty Paid
» The seller is responsible for all costs and risks involved in delivering the merchandise at its final location;

» The seller delivers the goods to the buyer with all the proper import documents at the designated destination place;

» The present INCOTERM establishes the biggest degree of responsibility to the seller concerning that it is who assumes the risks and costs related to the transportation and delivery of the merchandise to the designated place of destination;

» It should not be used when the seller is not able to assume responsibility for obtaining directly or indirectly the necessary import documentation of the goods;

Although this category may be used in any type of transportation, it should be consider to the DES or DEQ categories, in which the delivery is considered complete on board the ship or easily unloading at the designated port.