International Commerce Terms (Incoterms) are those that regulate the mutual acceptance between buyer and seller of the rights and obligations during the freight international transport, sharing the costs and risks along the route. In 2010 it had its last updating and it was re-named as Incoterms 2010.
When do the Incoterms and their 2010 updating appear.
Incoterms are terms created by the International Chamber of Commerce in order to standarize rules for all the parts involved in worldwide transport. It aims to make it more efficient through the homogenization of the rights and obligations in operational terms. It is worth stressing that to be able to use the Incoterms 2010 it is compulsory to draw up a sales contract, stablishing the Incoterms chosen rule and a named place
Incoterms 2010 replace Incoterms 2000, after the removal of four incoterms (DEQ, DES, DAF and DDU) and the creation of two new ones (DAT and DAP)
• Delivery of goods. It is the primary obligation of this rule. It is necessary to specify if the transport is direct (including the terms “E” and “D”) or indirect (including the terms “F” and “C”)
• Transfer of risks.
• Cost distribution. Usually, the seller bears the costs related to arrange the goods in a proper manner in order to be delivered, whereas the buyer bears all the remaining costs.
• Custom documentation formalities. Generally, export costs are the responsibility of the seller.
Types of Incoterms 2010.
E Group– Direct delivery.
•EXW (Ex Works): The seller makes the goods available at their premises, or at another named place. From the moment the seller gives the goods onwards, the buyer will bear all the costs.
F Group.- Indirect delivery (there is no payment regarding the main transport)
•FAS (Free Alongside Ship) (Only for sea transport): This term means that the seller delivers when the goods are at the port. The seller is required to bear all customs costs and arrangements.
•FOB (Free On Board)(Only for Sea Transport): The buyer bears all costs once the goods are at the port of loading.
•FCA (Free Carrier): The seller pays for the carriage to a named place of the delivery
C Group- Indirect delivery (paying the main transport).
•CFR (Cost And Freight) (Only Sea Transport). The seller bears all costs until the cargo arrives to its destination. However, risks are responsibility of the buyer from the moment that the goods are placed at the ship at the port of origin.
•CIF (Cost Insurance And Freight)(Only Sea Transport): The responsibilities are equal to the CFR. Furthermore, the seller is responsible for the goods insurance costs.
•CPT (Carriage Paid To): The seller bears all costs until the named place of destination. The buyer bears the risks of the goods from the loading start by the carrier, at the place of origin.
•CIP (Carriage And Insurance Paid): Same as CIF, but transport can be multimodal and not only sea transport.
D group- Direct delivery (at arrival).
•DAT (Delivered At Terminal): New Incoterms 2010. The seller is the responsible for all the costs until destination, including insurance and bearing the risks until the unload at the terminal. This type of Incoterms includes any means of transport.
•DAP (Delivered At Place): New Incoterms 2010. Transport and insurance costs are beared by the seller, who also bears the responsibility until the unload at the origin. The distinctive feature is that the seller doesn't beat the import costs.
•DDP (Delivered Duty Paid): It is valid for all means of transport. The seller bears all costs and all responsibility about the goods. The buyer is exent of any responsibility.
Which one should I choose for my goods transport?
It is a mutual agreement between both sides, but it is up to you decide the most appropriate Intercom for you. After the offer of the seller, you should study all the advantages and disadvantages that each one has.
At Lamaignere, as a logistics operator specialized in the
goods transport service and with a specialized team in all the fields regarding the international trading, we offer you our knowledge and experience to advice you at any time about which Incoterms are the best for you in order to optimize your international operations.
SHARE:
Chile 
United States 
Mexico 
Korea 
Panama 
Colombia 
Portugal
Arab Emirates 
Uruguay 
