{"id":9701,"date":"2022-01-18T17:21:45","date_gmt":"2022-01-18T23:21:45","guid":{"rendered":"https:\/\/www.rexcargo.com\/incoterms2020-2\/"},"modified":"2022-01-18T17:22:07","modified_gmt":"2022-01-18T23:22:07","slug":"incoterms2020-2","status":"publish","type":"page","link":"https:\/\/www.rexcargo.com\/en\/incoterms2020-2\/","title":{"rendered":"Incoterms2020"},"content":{"rendered":"

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Eng<\/h2>\n

Download Incoterms 2020 Here<\/a><\/span><\/strong><\/h2>\n

What are Incoterms\u00ae rules?<\/h2>\n

EXW – Ex Works – Ex works (+agreed place of delivery)<\/h2>\n

In Factory<\/strong> or Ex Works<\/strong> , the seller is only responsible for delivering the goods to its own or external facilities designated by it. Buyer bears all risk from there to destination. In Ex Works<\/strong> conditions, the seller makes the merchandise available to the buyer in its own premises but has no obligation to load the merchandise in the vehicle that comes to pick up the merchandise, nor will it dispatch the merchandise for export. The EXW<\/strong> incoterm\u00ae rule means the minimum obligation for the seller.<\/p>\n

If the seller offers to load the merchandise on the pick-up vehicle, we recommend using the FCA<\/strong> (Free Carrier) rule as this Incoterm\u00ae rule obliges the seller to load the merchandise at their own risk and expense.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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FCA – Free Carrier – Free Carrier (+agreed place of delivery)<\/h2>\n

\u201c Free Carrier<\/strong> \u201d is when the seller delivers the merchandise to the carrier (the person responsible for carrying out the freight) or another person designated by the buyer at the seller’s premises or at another agreed place. If the delivery point is at the seller’s facilities, the merchandise is delivered with its cargo in the means of transport arranged by the buyer. If the designated place is another, the merchandise is delivered when it is ready for unloading on the seller’s means of transport at the agreed point. It is recommended to specify in detail the point of the agreed place of delivery, since the risk is transferred to the buyer with the delivery of the merchandise.<\/p>\n

The incoterm\u00ae FCA<\/strong> rule requires the seller to clear the goods for export, if applicable. However, FCA<\/strong> exempts the seller from any obligation to clear the merchandise for import, payment of import duties or import customs formalities.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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CPT Carrier Paid To – Carriage paid to (+agreed place of delivery)<\/h2>\n

\u201c Carriage Paid To<\/strong> \u201d is when the seller delivers the merchandise to the carrier (the person responsible for carrying out the freight) or another person designated by the seller at an agreed place. With this rule, the seller must contract and bear the transportation costs to bring the merchandise to the agreed place.<\/p>\n

The seller pays for the transport to the agreed destination, but delivers the goods to the buyer (with transfer of risk) putting them in the possession of the carrier hired by said seller.<\/p>\n

The incoterm\u00ae CPT<\/strong> rule requires the seller to clear the merchandise for export, if applicable. However, CPT<\/strong> exempts the seller from any obligation to clear the merchandise for import, payment of import duties or import customs procedures.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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CIP – Carrier and Insurance Paid To – Transportation and Insurance paid to<\/strong> (+agreed place of delivery)<\/h2>\n

The seller pays for the transport to the agreed destination, but delivers the goods to the buyer (with transfer of risk) putting them in the possession of the carrier hired by said seller. This Incoterm requires the seller to take out insurance coverage under the ICCA conditions or similar.<\/p>\n

In the Incoterm\u00ae CIP<\/strong> rule, the seller must set insurance coverage in compliance with the Institute’s Cargo Clauses (A)<\/strong> , although it is also available to the buyer and seller to agree on a lower level of coverage. In Incoterms 2010\u00ae<\/a> limited insurance coverage was sufficient.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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DAP – Delivered at Place – Delivered at place (+agreed place of delivery)<\/h2>\n

\u201c Delivered at Place<\/strong> \u201d is when the seller delivers the merchandise, with transfer of risk, when it is made available to the buyer in the means of transport prepared for unloading at the agreed destination. The seller bears all the risks of bringing the merchandise to the agreed place.<\/p>\n

It is recommended to specify in full detail the agreed place of destination, since the risks up to that point are assumed by the seller. If you want the seller to clear the merchandise for import or carry out any import customs formality, you should use the Incoterm\u00ae DDP<\/strong> (Delivered Duties Paid) rule.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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Delivered at Place Unloaded (DPU) \u2013 Merchandise delivered and unloaded at the agreed place<\/h2>\n

The Incoterm\u00ae DPU (Merchandise delivered and unloaded at the agreed place of delivery) establishes that the seller delivers the merchandise, with transfer of risk, when it, once unloaded from the means of transport, is made available to the buyer at the place of delivery. agreed destination.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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DDP – Delivered Duty Paid – Delivered Duty Paid (+agreed place of delivery)<\/h2>\n

\u201c Delivered Duties Paid<\/strong> \u201d is when the seller delivers the merchandise, with transfer of risk, when he makes it available to the buyer cleared for import in the means of transport ready for unloading at the agreed destination. The seller bears all the risks of bringing the merchandise to the agreed place and must clear the merchandise for both import and export, as well as carry out all related customs formalities.<\/p>\n

The incoterm\u00ae DDP<\/strong> rule is the maximum obligation for the seller. It is recommended to specify in full detail the agreed place of destination, since the risks up to that point are assumed by the seller. If the seller cannot obtain import clearance, this rule is not used.<\/p>\n

If you want the buyer to bear all the risks and costs of import clearance, it is recommended to use DAP<\/strong> (Delivered at Place).<\/p>\n

Import taxes payable, such as VAT, will be borne by the seller.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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FAS – Free Alongside Ship – Free Alongside Ship (+agreed place of delivery)<\/h2>\n

\u201c Free Alongside Ship<\/strong> \u201d is when the seller delivers the goods to the buyer when the goods are placed alongside the ship (or barge) designated by the buyer at the port of shipment. From this point, the risk is assumed by the buyer.<\/p>\n

It is recommended to specify in full detail the point of loading at the agreed port of shipment, since the risks and costs up to that point are assumed by the seller.<\/p>\n

When the merchandise must be grouped or consolidated in containers, the seller delivers it to the carrier at a container terminal. From that moment, the seller loses control of the merchandise and it goes through multiple movements to be grouped in a container. When this happens, it is recommended to use the Incoterm\u00ae FCA<\/strong> (Free Carrier) rule.<\/p>\n

The incoterm\u00ae FAS<\/strong> rule requires the seller to clear the merchandise for export, if applicable. However, FAS<\/strong> exempts the seller from any obligation to clear the merchandise for import, payment of import duties or import customs procedures.<\/p>\n

When the merchandise must be grouped or consolidated in containers, the seller delivers it to the carrier at a container terminal. From that moment, the seller loses control of the merchandise and it goes through multiple movements to be grouped in a container. When this happens, it is recommended to use the Incoterm\u00ae FCA<\/strong> rule.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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FOB – Free On Board – Free on Board (+agreed place of delivery)<\/h2>\n

\u201c Free on Board<\/strong> \u201d is when the seller delivers the merchandise on board the vessel designated by the buyer at the port of shipment. The risk is transmitted when the goods are on board the ship.<\/p>\n

It is recommended to specify in full detail the point of loading at the agreed port of shipment, since the risks and costs up to that point are assumed by the seller.<\/p>\n

When the merchandise must be grouped or consolidated in containers, the seller provides the same to the carrier at a container terminal. From that moment on, the seller loses control of the merchandise, which undergoes several movements to be grouped in a container. When this happens, it is recommended to use the Incoterm\u00ae FCA<\/strong> (Free Carrier) rule.<\/p>\n

The FOB<\/strong> incoterm\u00ae rule requires the seller to clear the merchandise for export, if applicable. However, FOB exempts the seller from any obligation to clear the merchandise for import, payment of import duties or import customs procedures.<\/p>\n

In the Incoterm\u00ae FAS, FCA and FOB<\/strong> rules, the seller delivers the merchandise to a means of transport chosen by the buyer.<\/p>\n

At the time the merchandise is grouped or consolidated into containers, the seller delivers it to the carrier at a container terminal. From there, the seller loses control of the merchandise, which goes through multiple movements to be grouped in a container. In this situation, it is recommended to use the Incoterm\u00ae FCA<\/strong> rule.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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CFR – Cost and Freight – Cost and Freight (+agreed place of delivery)<\/h2>\n

\u201c Cost and Freight<\/strong> \u201d is when the seller assumes the cost and freight, duties not paid, to the agreed port of destination. Delivery occurs and the risk passes when the goods are on board the ship.<\/p>\n

When the merchandise is grouped or consolidated in containers, the seller provides it to the carrier at a container terminal. From that moment on, the seller loses control of the merchandise, which undergoes several movements to be grouped in a container. When this happens, it is recommended to use the Incoterm\u00ae CPT<\/strong> rule.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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CIF – Cost, Insurance and Freight – Cost, Insurance and Freight<\/strong> (+agreed place of delivery)<\/h2>\n

With the CIF<\/strong> Incoterm\u00ae, the seller assumes the cost of insurance and freight, duties not paid, to the agreed port of destination. Delivery occurs and the risk passes when the goods are on board the ship. This Incoterm requires the seller to take out limited insurance cover under ICCC conditions or similar.<\/p>\n

In the Incoterm\u00ae CIF<\/strong> rule, used mainly for the trading of raw materials, the Institute’s Load Clauses (C)<\/strong> are kept in their default position, leaving it to negotiation between buyer and seller to agree on a higher coverage.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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What are Incoterms\u00ae rules?<\/h2>\n

Incoterms\u00ae are rules created by the ICC (International Chamber of Commerce), internationally recognized, that define rights and obligations between buyer and seller and establish how the costs and risks will be allocated between the different parties of a transaction. More information here<\/a> .<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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Incoterms\u00ae 2020 tips: How to use them properly<\/h2>\n