Incoterms

 

Incoterms were established by the International Chamber of Commerce (ICC) to determine at which point the "transfer of title" takes place in a transaction of goods bought and sold.

 

Below, are the four main Incoterms used, their meaning and a simple diagram to illustrate at which point the transfer of title takes place.

 

EX Works (EXW) or EX Factory (EXF)

Transfer takes place at the vendor's premises once loaded onto the buyer's means of conveyance.

 

Free On Board (FOB) or Free Carrier (FCA) to a named point of lading

Transfer takes place when the goods have been placed on board, or in the charge of the buyer's carrier at a specified point of lading (loading). FCA was established by the ICC to cover inland ports serviced by carriers.

 

Cost and Freight (C+F) or Cost, Insurance and Freight (CIF)

to a named port of discharge or destination

Transfer takes place, when the vendor has delivered the goods (with, or without insurance coverage) to the buyer's named discharge port or destination.

 

Delivered, Duty Paid (DDP) / Delivered, Duty Unpaid (DDU)

Transfer takes place when the vendor has delivered the goods (with or without paying duties) to the buyer's premises or final place of rest as designated by the buyer.