Responsibility chart
When negotiating an international sales contract, both parties must pay close attention to the terms as well as to of the price of the sale. To make this as clear as possible, most countries have adopted an international set of commercial terms (INCOTERMS 2020) that precisely define the responsibilities and risks of both the buyer and the seller while the goods are in transit.
The following chart summarizes the responsibilities of both the buyer and the seller for each of the 13 INCOTERMS 2020. Additionally, immediately following the chart, an explanation of each term is included.
ALL TRANSPORT MODES
| CHARGES | EXW Ex works | FCA Free Carrier |
|---|---|---|
| Packaging | S or B | B |
| Labor charges | S | B* |
| Inland transport to loading place | S | B |
| Taxes/Duties in export customs clearance | S | B |
| Origin port charges | S | S |
| Loading place charges | S | S |
| Transport freight charges | S | S |
| Cargo insurance | S | S |
| Unloading charges | S | S |
| Port charges in destination | S | S |
| Taxes/Duties in import customs clearance | S | S |
| Inland transport to delivery place | S | S |
| Unloading in final destination | S | S |
SEA TRASPORT
| CHARGES | FAS Free Alongside Ship | FOB Free On Board | CFR Cost & Freight | CIF Cost Insurance & Freight |
|---|---|---|---|---|
| Packaging | B | B | B | B |
| Labor charges | B | B | B | B |
| Inland transport to loading port | B | B | B | B |
| Taxes/Duties in export customs clearance | B | B | B | B |
| Origin port charges | B | B | B | B |
| Loading charges | S | B | B | B |
| Transport freight charges | S | S | B | B |
| Cargo insurance | S | S | S | B |
| Unloading charges | S | S | S | S |
| Destination port charges | S | S | S | S |
| Taxes/Duties in import customs clearance | S | S | S | S |
| Inland transport to delivery place | S | S | S | S |
| Unloading in final destination | S | S | S | S |
ALL TRANSPORT MODES
| CHARGES | CPT Carriage Paid To | CIP Carriage Insurance Paid To | DAT Delivered at Terminal | DAP Delivered at Place | DDP Delivered Duty Paid |
|---|---|---|---|---|---|
| Packaging | B | B | B | B | B |
| Labor charges | B | B | B | B | B |
| Inland transport to loading place | B | B | B | B | B |
| Taxes/Duties in export customs clearance | B | B | B | B | B |
| Loading place charges | B | B | B | B | B |
| Transport freight charges | B | B | B | B | B |
| Origin port charges | B | B | B | B | B |
| Cargo insurance | Α | B | B ** | B | B |
| Unloading charges | B | B | B | B | B |
| Port charges in destination | B | B | B | B | B |
| Taxes/Duties in import customs clearance | S | S | S | B | B |
| Inland transport to delivery place | S | S | S | S | B |
| Unloading in final destination | S | S | S | S | B |
* The seller is responsible for labor if loading is done at his premises
** Under negotiation between seller and buyer
* There are 2 FCA terms: FCA Seller’s Premises in the case where the seller is only responsible for loading the goods and not for domestic transport and FCA Named Place (International Carrier) when the seller is responsible for domestic transport.
S= Seller
B=Buyer
13 Incoterms
EXW – Ex Works, the cargo is delivered to the buyer from the seller’s warehouse.
The seller does not contribute to the transport, all costs are on buyer.
Term, under which, international shipping is not paid by the seller.
FCA – Free Carrier, the cargo has been unloaded at the seller’s dock or at the place where it has been agreed to be available to the carrier or agent, without being loaded. This term can be used for any mode of transport.
FAS – Free Alongside Ship, the goods are delivered to the loading port agreed by contracting parties. It applies to bulk sea transport loads.
FOB – Free On Board Vessel, the goods are delivered to the port of loading agreed by contracting parties. Term under which international shipping is paid by the buyer.
CFR –Cost and Freight, the goods are delivered to the port of discharge agreed by contracting parties. Term under which international shipping is paid by the seller.
CIF – Cost, Insurance and Freight, the goods are delivered to the port of discharge agreed by contracting parties. Term under which international shipping and insurance is paid by the seller.
CPT – Carriage Paid To, the goods are delivered to the port of discharge agreed by contracting parties. This term is used for air-sea transport, both in containers and for roll-on roll-off goods. Delivery to the agreed destination. Term under which international shipping and insurance is paid by the seller.
CIP – Carriage and Insurance Paid To, the cargo is delivered to the port of discharge agreed by contracting parties. This term is used for air-sea transport, both in containers and for roll-on roll-off goods. Delivery to the agreed destination. Term under which international shipping and insurance is paid by the seller.
DAΤ – Delivered At Terminal, seller must deliver the goods released to buyer at the agreed terminal at the port or place of destination, on the date and within the agreed time. The DAT term binds seller with the export customs clearance of cargo. However, seller has no obligation to undertake import clearance at destination. Term under which international shipping paid by the seller.
DAP – Delivered At Place, seller must deliver the goods released to buyer on the means of approach transport ready for unloading at the agreed place of destination. He must clear the goods on export, however he has no obligation to clear the goods on import. The seller undertakes at his own expense to conclude a contract for the transport of the goods to the agreed place of destination and their unloading on arrival from the means of transport. Term under which international shipping paid by the seller.
DDP – Delivered Duty Paid, the goods are delivered to the place of destination agreed by the contracting parties, without being unloaded. This term can be used for any mode of transport. Term under which international shipping paid by the seller.