INCOTERMS 2000

3. Method Of Presenting Incoterms 2000

3.1 The terms have been grouped into four different categories for easier reading and understanding. These follow the logical sequence of the movement of cargo from the seller to the buyer starting with the only term whereby the seller makes the goods available to the buyer at the seller's own premises (the E-term Ex works); followed by the second group where the seller is called upon to deliver the goods to the carrier appointed by the buyer (F-terms FCA, FAS, and FOB); then the third group where the seller is called upon to contract for the main carriage but without assuming the risk of loss or damage, or additional costs due to events after shipment and dispatch ( C-terms CFR,CIF,CPT and CIP); and finally the D-terms DAF,DES,DEQ,DDU and DDP, where the seller has to bear all costs and risks needed to bring the goods to the country of destination.

3.2 We can now say for ease of reference that:

· Group E covers departure,

· Group F is where main carriage is unpaid,

· Group C is main carriage paid and

· Group D is arrival in country of destination.

3.3 Incoterms are presented in 3-letter codes in order of minimum risk to maximum risk to the seller.

· EXW- Ex works suppliers premises

· FCA- Free Carrier…(named place)
· 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)
· CPT- Carriage paid to…(named place of destination)
· CIP- Carriage and Insurance Paid to…(named place of destination)

· DAF- Delivered at Frontier…(named place)
· DES- Delivered ex Ship…(named port of destination)
· DEQ- Delivered ex Quay (duty paid)…(named port of destination)
· DDU- Delivered duty unpaid…(named place of destination)
· DDP- Delivered duty paid…(named place of destination)

Notes: -

1. Incoterms are designed to arrange for risk to transfer from Seller to Buyer at a place where goods can be inspected. So FOB, CFR, and CIF all arrange for this to occur upon loading on board the vessel. Therefore when goods are containerized these terms are inappropriate. The ICC has, accordingly, drafted 3 Combined Transport equivalents, which should be used when applying Combined Transport Services. These are FCA, CPT and CIP. These terms transfer risk from Seller to Buyer at the inland place where the carrier takes charge of the goods.

2. Incoterms can be divided into recommended usages by mode of carriage: -

· All modes (i.e. Combined Transport)- EXW, FCA, CPT, CIP, DAF, DDU, DDP
· Conventional Seafreight, Port to Port- FAS, FOB, CFR, CIF, DES, DEQ
· Air transport- FCA
· Rail Transport -FCA