CHAPTER 28 - INCOTERMS 2010 (INTERNATIONAL COMMERCIAL TERMS)

The purpose of Incoterms is to provide a set of standard and uniform international rules for the interpretation of most commonly used trade terms in foreign trade.

·      These are official trade shipping terms agreed by the International Chamber of Commerce, Paris.

·       There are 11 Inco Terms and comes into force on 01st January 2011.

·      Each Inco Term defines the responsibilities of buyers and sellers for the delivery of goods under sales contract.

·      They are authoritative rules for determining how costs and risks are allocated to the parties.

RULES FOR ANY MODE OF TRANSPORT: (AIR, ROAD, RAIL AND MULTIMODAL MODES)

·         EXW     Ex Works

·         FCA       Free Carrier

·         CPT       Carriage Paid To

·         CIP        Carriage and Insurance Paid To

·         DAT       Delivered at Terminal

·         DAP      Delivered at Place

·         DDP      Delivery Duty Paid

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

·         FAS      Free Alongside Ship

·         FOB     Free on Board

·         CFR     Cost & Freight

·         CIF      Cost, Insurance & Freight

The first class includes the seven Incoterms 2010 rules that can be used irrespective of the mode of transport selected and irrespective of whether one or more than one mode of transport is employed. They can be used even where there is no maritime transport at all. It is important to remember, however, that these rules can be used in cases where a ship is used for part of the carriage.

In the second class of Incoterms 2010 rules, the point of delivery and the place to which the goods are carried to the buyer are both ports.