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INCO TERMS
         By
G. HARI SHANKAR PRASAD
INCO terms are internationally accepted commercial terms
defining the respective roles of the buyer and seller in the
arrangement of transportation and other responsibilities.
EXW (+ the named place)
Ex Works – Ex means from, works means factory, warehouse,
which is seller’s premises. EXW applies to goods available only at
the seller’s premises. Buyer is responsible for loading the goods
on truck or container at the seller’s premises and for the
subsequent costs and risks. In practice, it is not uncommon that
the seller loads the goods on truck or container at the seller’s
premises without charging loading fee.
The term EXW is commonly used between the manufacturer
(seller) and the export trader (buyer). Some manufacturers may
use the term Ex factory which is same as Ex Works
FCA (+ Named point of departure)
Free Carrier – the delivery of goods on truck, rail car or container
at the specified point of departure, which is usually a named
railroad station or a named cargo terminal or into the custody of
the carrier, at seller’s expense, cleared for exports. Buyer
responsible for the main carriage / freight, cargo insurance and
other costs and risks.
FAS (+Named port of origin)
Free Alongside Ship – goods are placed in the dock shed or at the
side of the ship, within the reach of its loading equipment so that
they can be loaded aboard the ship, at seller’s expense. Buyer is
responsible for the loading fee, main carriage / freight, cargo
insurance and other costs and risks.
FOB (+Named port of origin)
Free On Board – the delivery of goods on board the vessel at the
named port of origin, at seller’s expense. Buyer is responsible for
the main carriage / freight, cargo insurance and other costs and
risks. Under the rules of INCO terms 1990 the term FOB is used
for ocean transport only. However, many still use it for air freight
also.


CFR (+Named port of destination)
Cost and Freight – the delivery of goods to the named port of
destination at the seller’s expense. Buyer is responsible for cargo
insurance and other costs and risks. This term also to be used for
ocean transport only. CFR was formerly written as C&F and many
still use it.
CIF (+Named port of destination)
Cost, Insurance and Freight – the cargo insurance and delivery of
goods to the named port of destination at the seller’s expense.
Buyer is responsible for import customs clearance and other costs
and risks. As per 1990 INCO terms this is applicable to ocean
freight only.


CPT (Named place of destination)
Carriage Paid To – the delivery of goods to the named place of
destination at seller’s expense. Buyer assumes the cargo
insurance, import customs clearance, payment of customs duties
and taxes, and other costs and risks.
Used for any mode of transportation.
CIP (+Named place of destination)
Carriage and Insurance Paid To – the delivery of goods and the
cargo insurance to the named place of destination at seller’s
expense. Buyer assumes import customs clearance, payment of
customs duties and taxes and other costs and risks.
Used for any mode of transportation.


DAF (+Named point at frontier)
Delivered At Frontier – Delivery of goods to the specified point at
the frontier at seller’s expense. Buyer is responsible for import
customs clearance, payment of customs duties and taxes and
other costs and risks.
Used for any mode of transportation
DES (+ Named port of destination)
Delivered Ex Ship – The delivery of goods on board at the named
port of destination, at seller’s expense. Buyer assumes the
unloading fee, import customs clearance, payment of customs
duties and taxes, cargo insurance and other costs and other costs
and risks.


DEQ (+ Named port of destination)
Delivered Ex Quay
The delivery of goods to the quay (the port) at destination at
seller’s expense. Seller is responsible for import customs
clearance and payment of customs duties and taxes at buyers
end. Buyer assumes cargo insurance and other costs and risks
Used for sea and inland waterway transportation
DDU (+ Named point of destination)
Delivered Duty Unpaid – The delivery of goods and the cargo
insurance to the final point at destination. Buyer assumes the
unloading fee, import customs clearance, payment of customs
duties and taxes.
Used for any mode of transportation


DDP (+ Named point of destination)
Delivered Duty Paid – the seller is responsible for most of the
expenses, which include the cargo insurance, import customs
clearance, and payment of customs duties and taxes at the
buyer’s end, and delivery of goods to the final point at destination.
Used for any mode of transportation
THANK YOU

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Inco terms

  • 1. INCO TERMS By G. HARI SHANKAR PRASAD
  • 2. INCO terms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities. EXW (+ the named place) Ex Works – Ex means from, works means factory, warehouse, which is seller’s premises. EXW applies to goods available only at the seller’s premises. Buyer is responsible for loading the goods on truck or container at the seller’s premises and for the subsequent costs and risks. In practice, it is not uncommon that the seller loads the goods on truck or container at the seller’s premises without charging loading fee. The term EXW is commonly used between the manufacturer (seller) and the export trader (buyer). Some manufacturers may use the term Ex factory which is same as Ex Works
  • 3. FCA (+ Named point of departure) Free Carrier – the delivery of goods on truck, rail car or container at the specified point of departure, which is usually a named railroad station or a named cargo terminal or into the custody of the carrier, at seller’s expense, cleared for exports. Buyer responsible for the main carriage / freight, cargo insurance and other costs and risks. FAS (+Named port of origin) Free Alongside Ship – goods are placed in the dock shed or at the side of the ship, within the reach of its loading equipment so that they can be loaded aboard the ship, at seller’s expense. Buyer is responsible for the loading fee, main carriage / freight, cargo insurance and other costs and risks.
  • 4. FOB (+Named port of origin) Free On Board – the delivery of goods on board the vessel at the named port of origin, at seller’s expense. Buyer is responsible for the main carriage / freight, cargo insurance and other costs and risks. Under the rules of INCO terms 1990 the term FOB is used for ocean transport only. However, many still use it for air freight also. CFR (+Named port of destination) Cost and Freight – the delivery of goods to the named port of destination at the seller’s expense. Buyer is responsible for cargo insurance and other costs and risks. This term also to be used for ocean transport only. CFR was formerly written as C&F and many still use it.
  • 5. CIF (+Named port of destination) Cost, Insurance and Freight – the cargo insurance and delivery of goods to the named port of destination at the seller’s expense. Buyer is responsible for import customs clearance and other costs and risks. As per 1990 INCO terms this is applicable to ocean freight only. CPT (Named place of destination) Carriage Paid To – the delivery of goods to the named place of destination at seller’s expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks. Used for any mode of transportation.
  • 6. CIP (+Named place of destination) Carriage and Insurance Paid To – the delivery of goods and the cargo insurance to the named place of destination at seller’s expense. Buyer assumes import customs clearance, payment of customs duties and taxes and other costs and risks. Used for any mode of transportation. DAF (+Named point at frontier) Delivered At Frontier – Delivery of goods to the specified point at the frontier at seller’s expense. Buyer is responsible for import customs clearance, payment of customs duties and taxes and other costs and risks. Used for any mode of transportation
  • 7. DES (+ Named port of destination) Delivered Ex Ship – The delivery of goods on board at the named port of destination, at seller’s expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance and other costs and other costs and risks. DEQ (+ Named port of destination) Delivered Ex Quay The delivery of goods to the quay (the port) at destination at seller’s expense. Seller is responsible for import customs clearance and payment of customs duties and taxes at buyers end. Buyer assumes cargo insurance and other costs and risks Used for sea and inland waterway transportation
  • 8. DDU (+ Named point of destination) Delivered Duty Unpaid – The delivery of goods and the cargo insurance to the final point at destination. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes. Used for any mode of transportation DDP (+ Named point of destination) Delivered Duty Paid – the seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer’s end, and delivery of goods to the final point at destination. Used for any mode of transportation