Incoterms 2000

Incoterms 2000 provides Preambles explaining the function of each Incoterm. These are reproduced in full for visitors to this site. For example, the Preamble to FAS FREE ALONGSIDE SHIP states that under FAS the seller delivers when the goods are placed alongside the vessel at the named port of shipment. "The buyer has to bear all costs and risks of loss of or damage to the goods from that moment."

Important: Incoterms 2000 will not apply unless incorporated into the contract of sale by clearly specifying that the contract is governed by Incoterms 2000. Here are three examples of correct use of Incoterms: FCA Kuala Lumpur, Incoterms 2000 FOB Liverpool, Incoterms 2000 DDU Frankfurt, X GmbH Warehouse #1 Incoterms 2000

Group E Departure Under EXW, the seller minimizes his risk by only making the goods available at his own premises.     Seller Carrier Buyer           Export Clearance       Import Clearance EXW Exworks                 Carriage to be arranged by: Carriage of goods The buyer.               Risk transfer: Risks At the disposal of buyer.               Cost transfer: Costs At the disposal of buyer.                 Group F Main carriage not paid by seller Under F Terms, and under FCA unless otherwise agreed, the seller arranges and pays for the pre-carriage in the country of export.     Seller Carrier Buyer           Export Clearance       Import Clearance FCA Free Carrier                 Carriage to be arranged by: Carriage of goods The buyer or by the seller on the buyer's behalf.               Risk transfer: Risks When goods have been delivered to the carrier at the named place.               Cost transfer: Costs When goods have been delivered to the carrier at the named place.                 FAS Free Alongside Ship                 Carriage to be arranged by: Carriage of goods The buyer.               Risk transfer: Risks When goods have been placed alongside the ship.               Cost transfer: Costs When goods have been placed alongside the ship.                 FOB Free On Board                 Carriage to be arranged by: Carriage of goods The buyer.               Risk transfer: Risks When goods pass the ship's rail.               Cost transfer: Costs When goods pass the ship's rail.                 Group C Main carriage paid by seller Under C Terms the seller arranges and pays for the main carriage but without assuming the risk of the main carriage.     Seller Carrier Buyer           Export Clearance       Import Clearance CFR Cost And Freight                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods pass the ship's rail.               Cost transfer: Costs At port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.                 CIF Cost Insurance And Freight                 Carriage to be arranged by: Carriage of goods The seller. (Including insurance)               Risk transfer: Risks When goods pass the ship's rail.               Cost transfer: Costs At port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.                 CPT Carriage Paid To                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods have been delivered to carrier.               Cost transfer: Costs At port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.                 CIP Carriage And Insurance Paid                 Carriage to be arranged by: Carriage of goods The seller. (Including insurance)               Risk transfer: Risks When goods have been delivered to carrier.               Cost transfer: Costs At port of destination, buyer paying such costs as are not for the seller's account under the contract of carriage.                 Group D Arrival Under D Terms the seller's cost/risk is maximized because he must make the goods available upon arrival at the agreed destination.     Seller Carrier Buyer           Export Clearance       Import Clearance DAF Delivered At Frontier                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods have been delivered at the frontier.               Cost transfer: Costs When goods have been delivered at the frontier.                 DES Delivered Ex Ship                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods are placed at the disposal of the buyer on board the ship.               Cost transfer: Costs When goods are placed at the disposal of the buyer on board the ship.                 DEQ Delivered Ex Quay                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods are placed at the disposal of the buyer on the quay.               Cost transfer: Costs When goods are placed at the disposal of the buyer on the quay.                 DDU Delivered Duty Unpaid                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods are placed at the disposal of the buyer.               Cost transfer: Costs When goods are placed at the disposal of the buyer.                 DDP Delivered Duty Paid                 Carriage to be arranged by: Carriage of goods The seller.               Risk transfer: Risks When goods are placed at the disposal of the buyer.               Cost transfer: Costs When goods are placed at the disposal of the buyer.