Incoterms (International Commercial Terms)
Incoterms; These are the rules that determine the distribution of responsibilities and costs between the parties in the stages of transportation and delivery of the goods, regulated by the ICC - International Chamber of Commerce. Incoterms items are expressed with abbreviations consisting of the initials of English definitions.
Incoterms, which were first published in 1936, were revised in 1963, 1967, 1976, 1980, 1990, 2000 depending on the changing conditions. The currently in use Incoterms 2010 version entered into force on 01 January 2011. All versions can be used, provided that it is specified in the contract and documents. Rules are legally optional.
The contract and documents must specify the Incoterms version along with the place of installation.
3 important changes between Incoterms version 2010 and 2000;
– E (EXW,
– F (FOB, FCA, FAS,
– C (CFR, CIF, CPT, CIP),
– grouping with D (DAF, DES, DEQ, DDU, DDP);
– Rules for all modes of transport (EXW, FCA, CPT, CIP, DAF, DDU, DDP)
– The rules regarding maritime and inland waterways transportation (FAS, FOB, CFR, CIF, DES, DEQ) have been rearranged,
– DAP instead of DAF, DES, DDU, DAT instead of DEQ,
– In the 2000 version, in FOB, CFR, CF delivery forms, the condition that the goods should not pass the ship's rail, in the 2010 version, the condition that the goods should be loaded correctly on the ship was introduced.
Delivery Forms / Classification and Explanations
1 – Types of Delivery Used for All Modes of Transport
EXW – Ex Works
Delivery at the Exporter's Workplace; It is the delivery of the goods at the designated place such as the exporter's warehouse or factory, with all costs and risks borne by the importer.
FCA – Free Carrier
Delivery to Carrier; It is the delivery of the goods to the carrier determined by the importer, at the place determined in the exporter's country.
CPT – Carriage Paid To
Freight Paid Delivery; It is the delivery where the transportation cost (freight) of the specified vehicle is paid by the exporter, and insurance and other expenses belong to the importer.
CIP – Carriage and In+surance Paid To
Handling Fee, Insurance paid Delivery; It is the form of delivery in which the exporter pays the transportation fee and insurance costs up to the point determined in the importer's country.
DAT – Delivered at Terminal
Delivery at the Terminal; It is the delivery of the goods by being unloaded from the vehicle at the port/terminal determined in the importer's country, with all costs and risks borne by the exporter.
DAP – Delivered at Place
Delivery at the Designated Place; The goods are delivered to the address specified in the importer's country, all expenses paid, excluding taxes.
DDP – Delivered Duty Paid
Delivery with Customs Duties Paid; It is the delivery of the goods in the importer's country with all costs and customs duties paid.
2 – Delivery Types Used in Sea and Inland Waters
FAS – Free Alongside Ship
Next to the ship Delivery; It is the delivery of the goods at the quay or loading area to be loaded on the specified sea vehicle.
FOB – Free on Board
Delivery on Board; It is the type of delivery where the goods are loaded on the specified sea vehicle and the costs and responsibilities such as transportation and insurance are transferred to the importer.
CFR – Cost and Freight
Freight Paid Delivery; It is the delivery where the transportation cost (freight) of the determined sea vehicle of the goods is paid by the exporter, insurance and other expenses belong to the importer.
CIF – Cost, Insurance and Freight
Delivery Charges, Freight, Insurance Paid; It is the delivery of the goods to the delivery area determined in the importer's country with the shipping costs and the insurance costs covered.