top of page

Incoterms 2000

Incoterms 2000, or the International Commercial Terms, is the international set of rules and agreement of transferring goods and risk from seller to buyer. It is important when negotiating the purchase of goods that both parties pay attention to the terms and responsibilities related to the transfer of goods. For that reason, Incoterms 2000 has been adopted to define the exact responsibilities between the shipper and consignee while cargo is in transit.


Ex-Works: Seller is not responsible for international transportation. EXW places maximum responsibility on the buyer and minimum on to the seller. In this transaction the merchandise is made available at the seller facility and the buyer is responsible for all of the shipping arrangements – pre-carriage, loading on vessel, insurance, ocean freight, unloading at destination, inland transportation, and customs clearance.


Free Carrier: Arranging warehouse loading and inland transportation to the port of loading is the seller’s responsibility, but they are acting at the risk and expense of the buyer. The Buyer is responsible for the insurance.


Free Alongside Ship: A popular way of transportation for non-containerized ocean shipments. Shipper is responsible for export clearance of the merchandise and transfer is accomplished when the goods are turned over to the buyer for transportation and insurance.


Free On Board: Seller gives responsibility to the buyer when the cargo passes the ship’s rail. Buyer is liable for all of the risk and damages of the goods after the cargo has been loaded on the vessel. Free on board, also known as freight on board, is one of the most common terms of transportation.


Cost and Freight: This term defines shipper responsibility for ocean transportation of the goods to port of destination. Buyer covers insurance from the port of origin to the port of destination.


Cost, Insurance, and Freight: This shipping arrangement is very similar to CFR, but the seller is the insurer of the goods to the port of destination. Transfer of responsibility is accomplished at the port of destination. Buyer covers all related charges with an import customs clearance.


Carriage Paid To: Seller assumes the delivery risk and transportation to a named place. Buyer assumes the cargo insurance and customs clearance. CPT arrangement is common in air and containerized ocean shipments.


Carriage and Insurance Paid: To assume the risk for delivery of the goods and provide the insurance to the named place destination. Buyer is responsible for the custom duties and taxes. CIP terms usually arrange multimodal transportation.


Delivered At Frontier: Seller is responsible for cargo delivery to a border cross frontier and buyer assumes responsibility to arrange transportation across the border, import customs clearance, and taxes payment.


Delivered Ex-Ship: Involves goods delivery on an ocean vessel at the designated port of destination, not unloading at the seller’s expense. Buyer pays for the vessel unloading fee, insurance, and customs clearance and taxes. Any expenses after the ship's arrival are the buyer’s responsibility.


Delivered Ex-Quay: Involves the ocean delivery of merchandise to a named port of destination at the shipper’s expense. Shipper assumes responsibility for vessel unloading charges, but no further inland transportation. Buyer is responsible for the customs clearance.


Delivered Duty Unpaid: Involves the seller's responsibility for cargo delivery to the final destination but not unloaded and not cleared. Buyer is responsible for customs duties and taxes. The shipper may decide not to insure the goods at their own risk.


Delivered Duty Paid: The shipper is responsible for most of the expenses. This is a common term for the courier or intermodal type of transportation. The shipper is responsible for freight delivery at the seller facility and customs clearance. The shipper may decide not to insure the freight at their own risk.

bottom of page