Finance & Contract
Administration Council Meeting
May 17-18, 2017
Chicago, Illinois

Founded in 1948 by Adrienne Coppersmith. Current leadership Jeff and
Bud Coppersmith are third generation in the family business.
Coppersmith Global Logistics is a licensed Customs Broker, International
Freight Forwarder and NVOCC.
Validated member of the C-TPAT program and a certified ACE participant.
Coppersmith handles over 100,000 shipments every year from large
companies like Panasonic, Kia Motors , and Sunkist. No matter the volume you
have the quality of our service will be consistent.
Coppersmith Delivers a World of Confidence

To define the Incoterm options.
To enhance your understanding of the forwarding
process and the part that Incoterms play in smooth
transactions.
How Incoterms relate to contracts.
To help you determine which Incoterm is best for your
logistics circumstance.

INternational COmmercial TERMS
“INCOTERMS define the mutual obligations of seller and buyer
arising from the movement of goods under an international contract
from the standpoint of risks, costs and documents.”
-United Nations Conference on Trade and Development , 1990
Simply- A set of international rules for the interpretation of the
most commonly used foreign trade terms.

Terms covered by Incoterms
Warehousing
Packing and loading
Inland freight
Terminal charges
Freight forwarder’s fees
Ocean/air freight
Duty, taxes, & customs clearance
Delivery
Security Clearances

Before
1921
• 1812: Creation of the first FOB term.
• 1895: CIF term was created.
• 1919: The EUA (European Union Emission Trading Scheme) created its own terms
1921-1923
•1921: Incoterms first conceived by International Chamber of Commerce (ICC).
•1923: The first six rules were developed- FOB,FAS, FOT, FOR, Free Delivered CIF and C&F.
1936- 1976
•1936: Incoterms first implemented.
•1956: The ICC created the next version of Incoterms.
•1976: The ICC created new Incoterms, which included air transportation.
1980-2000
• 1980: The ICC adopted three new Incoterms applicable to all modes of transportation. At this time Incoterms numbered at fourteen.
• 1990: New Incoterms were created to suit intermodal transport.
• 2000: The ICC made a simplification in the allocation of loading and unloading costs.
• At this point there were thirteen Incoterms.
2010-Now
•2010: The number of Incoterms decreased to eleven.
•2011: These incoterms were put into effect January 1, 2011.

Because they-
Set international rules for commonly used terms
in foreign trade.
Define obligations of both parties involved in the
transaction.
Determine the distribution and transfer of risks regarding
goods delivered from seller to buyer.
State the clear sharing of expenses between the parties
during transport.
The rapid expansion of world trade and new trends in
global transportation means that the same rules
cannot be applied effectively in any circumstance
without considering the new factors and influences.

International
Transportation
4
Handling
Inbound
Customs
Clearance
Duties
Final
Transportation
Unloading
Packing
Loading
Preliminary
Transportation
Customs
Clearance
for Export
Handling
Outbound
Insurance
1 2 3
5
6
7
8
9
10
11

CFR- Cost and Freight
CIF- Cost, Insurance and Freight
CPT- Carriage Paid To
CIP- Carriage and Insurance Paid To
DAT- Delivered at Terminal
DAP- Delivered at Place
DDP- Delivered Duty Paid
EXW- Ex Works
FCA- Free Carrier
FAS- Free Alongside Ship
FOB- Free on Board
Contract for
carriage without
assuming risk of
loss during
shipment
Bear all costs and
risks needed to
bring goods to
place of
destination
Make goods
available at own
premises
Deliver goods to a
carrier appointed
by buyer

Service
•EXW- Ex Works (…Named
Place of Delivery)
•FCA- Free Carrier (…Named
Place of Delivery)
Any Mode of transport
including Multimodal
•CPT- Carriage Paid To
(…Named Place of
Destination)
•CIP- Carriage & Insurance
Paid To (…Named Place of
Destination)
•DAT- Delivered at Terminal
(Named Place/Port of
Delivery)
•DAP- Delivered at Place
(…Named Place of
Destination)
•DDP- Delivered Duty Paid
(…Named Place of
Destination)
Ocean
•FAS- Free Alongside Ship
(…Named Port of Shipment)
•FOB- Free On Board
(…Named Port of Shipment)
•CFR- Cost and Freight
(…Named Port of
Destination)
•CIF- Cost, Insurance and
Freight (…Named Port of
Destination)
Acronym reflect the mode and where lines are drawn.

Use the phrase “Incoterms 2010” after the rule and named
place.
Clarifies that 2000 version does not apply.
Ensure you are naming the right location.
EXW, FCA, FAS, FOB, DAT, DAP =place of delivery.
CPT, CIP, CFR, CIF=place of destination.
Use contract of sale or terms and conditions.
Modifying Incoterms Rules
Not advised.
If you do modify rules ensure contract clarifies what you are modifying
and what you are not.

CFR- Cost and Freight
Seller delivers the goods on board the vessel or procures the goods
already so delivered.
The risk of loss of or damage to the goods passes when the goods are
on board the vessel.
The seller must contract for and pay the costs and freight necessary to
bring the goods to the named port of destination.
Notes
Seller pays for unloading if the contract of carriage covers unloading
Seller clears goods for export but not import.
Seller has no obligation to obtain insurance.
Place of delivery of goods
Seller’s delivery obligation is fulfilled when goods are on board the
vessel.
Risk of loss passes when the goods are on board the vessel.
Port of destination
Seller pays for carriage to port of destination.

CIF- Cost Insurance and Freight
Seller delivers the goods on board the vessel or procures the goods
already so delivered.
The risk of loss of damage to the goods passes when the goods are on
board the vessel.
The seller must contract for and pay the costs and freight necessary to
bring the goods to the named port of destination.
Notes
Like CFR but with additional obligation to procure insurance to port of
destination.
Insurance requirement is minimum cover (institute cargo clause c) in
the amount of contract price plus 10% from point of delivery to point of
destination.
Seller clears goods for export but not import.

CIP- Carriage and Insurance Paid to
Seller delivers the goods to the carrier or another person nominated by
the seller at an agreed place (if any such place is agreed between the
parties); seller must contract for and pay the costs of carriage necessary
to bring the goods to the named place of destination.
Notes
Like CPT but with the additional requirement that seller pay for
insurance to the named destination
Insurance requirement is minimum cover (institute cargo clause c) in
the amount of contract price plus 10% from point of delivery to point of
destination
Buyer may pay for additional coverage. Seller must provide the
information necessary to allow buyer to do so.

CPT- Carriage Paid To
Seller delivers the goods to the carrier or another person nominated by
the seller at an agreed place (if any place is agreed between the parties)
and the seller must contract for and pay the costs of carriage necessary
to bring the goods to the named place of destination.
Notes
Seller clears goods for export and pays for transport through any
country necessary to delivery
Seller has no obligation to pay for insurance but must provide buyer
information to buy insurance at buyer’s risk and expense
Buyer obtains import licenses and carries out customs formalities
Seller pays for both loading and unloading if covered by contract of
carriage

DAP- Delivered at Place
Seller delivers when the goods are placed at the disposal of the buyer on the
arriving means of transport ready for unloading at the named place of
destination.
The seller bears all risks involved in bringing the good to the named place.
Notes
Much like DAT, but with additional obligation by seller into country of
delivery
Goods are placed at buyer’s disposal at named location ready for unloading;
risk passes at that point
Seller clears goods for export but not import (use DDP if intent is to require
seller to clear goods for import also).
No obligation on seller to purchase insurance

DAT- Delivered at Terminal
Seller delivers when the goods, once unloaded from the arriving means of
transport, are placed at the disposal of the buyer at a named terminal at the
named port or place of destination.
“Terminal” includes any place, whether covered or not, such as a quay,
warehouse, container yard or road, rail or air cargo terminal.
The seller bears all risks involved in bringing the goods to and unloading
them at the terminal at the named port or place of destination.
Notes
Seller’s obligation is fulfilled and risk of loss passes at same time: when the
goods are unloaded at the arriving terminal and placed at buyer’s disposal.
Can specify a point within the terminal at which time the obligation is
complete.
Seller clears goods for export but not for import.
No requirement of insurance.
If the intention is to carry seller’s obligation further into buyer’s country, use
DAP or DDP.

DDP- Delivered Duty Paid
Seller delivers the goods when the goods are placed at the disposal of the
buyer, cleared for import on the arriving means of transport ready for
unloading at the named place of destination.
The seller bears all the costs and risks involved in bringing the goods to the
place of destination and has an obligation to clear the goods not only for
export but also for import, to pay any duty for both export and import and to
carry out all customs formalities.
Notes
Like DAP, but including seller’s obligation to clear goods for import—pay for
any necessary licenses.
Maximum obligation for seller.
If seller is not well-suited to clear goods for import, DAP should be used
No obligation to pay for insurance.

Ex Works
Seller delivers when it places the goods at the disposal of buyer at the
seller’s premises or another named place (i.e. works, factory,
warehouse, etc.).
Seller does not need to load the goods on any collecting vehicle or clear
the goods for export, where such clearance is applicable.
Fewest up front requirements for seller
Notes
Seller has no obligation to load goods, even if better-suited to do so
If seller does load goods, it does so at buyer’s expense and risk
Better-suited to domestic transport (no obligation that seller clear
goods for export—only provide assistance if necessary at buyer’s
expense and risk)
Buyer bears all risk of loss from time seller places goods at buyer’s
disposal.

FAS- Free Alongside Ship
Seller delivers when the goods are placed alongside the vessel (e.g., on
a quay or a barge) nominated by the buyer at the named port of
shipment.
The risk of loss of or damage to the goods passes when the goods are
alongside the ship, the buyer bears all costs from the moment onwards.
Notes
Can be used in a string sale where seller procures goods already
delivered for shipment.
Seller is obligated to clear goods for export but not import.
Seller has no obligation to pay for contracts of carriage or insurance but
may contract for carriage and must assist buyer by providing necessary
information for insurance.
Not appropriate when goods in container and delivered to carrier at
terminal; use FCA

FCA- Free Carrier
Seller delivers the goods to the carrier or another person nominated by
the buyer at the seller’s premises or another named place.
The parties are well advised to specify as clearly as possible the point
within the named place of delivery, as the risk passes to the buyer at
that point.
Notes
Seller does clear goods for export; import formalities are buyer’s
responsibility
Seller may contract for carriage at buyer’s expense and risk

FOB- Free On Board
Seller delivers the goods on board the vessel nominated by the buyer at
the named port of shipment or procures the goods already so delivered.
The risk of loss of or damage to the goods passes when the goods are
on board the vessel, and the buyer bears all costs from that moment
onwards.
Notes
Notice change in 2010: “free on board” no longer means across the
ship’s rail; now means on board the vessel.
Another change in 2010: if requested by buyer or if it is commercial
practice and buyer does not instruct otherwise, seller may contract for
carriage at buyer’s risk and expense; seller may decline but must notify
buyer promptly
Like FAS but goods must be placed on board.

Seattle
3100 S 176th St. Suite 120
Seattle, WA 98188
Phone: (206) 242-6181 • Fax: (206) 242-0089
Email: sea@coppersmith.com
Portland
6135 NE 80th Avenue Suite A4
Portland, OR 97218
Phone: (503) 249-1400 • Fax: (503) 249-3950
Email: pdx@coppersmith.com
San Francisco
434 Rozzi Place
South San Francisco, CA 94080
Phone: (650) 872-1225 • Fax: (650) 872-1070
Email: sfo@coppersmith.com
Los Angeles - Corporate
525 S. Douglas Street
El Segundo, CA 90245
Phone: (310) 607-8000 • Fax: (310) 607-8001
Email: lax@coppersmith.com
Dallas
1200 Minters Chapel Road. Suite 100
Grapevine, TX 76051
Phone: (817) 421-8989 • Fax: (817) 421-6464
Email: dfw@coppersmith.com
Houston
15904 International Plaza Drive
Houston, TX 77032
Phone: (281) 442-4800 • Fax: (281) 442-8892
Email: iah@coppersmith.com
New York
One Cross Island Plaza, Suite 227A
Rosedale, NY 11422
Phone: (718) 723-5000 • Fax: (718) 723-5005
Email: jfk@coppersmith.com
Chicago
760 Bonnie Lane
Elk Grove, IL 60007
Phone: (847) 437-1500 • Fax: (847) 437-1501
Email: ord@coppersmith.com
Atlanta
114 Southfield Parkway
Suite 170
Forest Park, GA 30297
Phone: (404)366-1650 • Fax: (404) 366-1649
Email: atl@coppersmith.com
Coppersmith has nine
offices across the United
States at all the key ports
of entry. Every office has
at least one licensed
customs broker and a
trained staff well versed
in various imports.
Committed! Connected! Complete!