IncoTerms 2010 International Trade Import Export Business Supply Chain Logistics Documents


Understanding IncoTerms
is a vital part of international trade. When exporting products overseas,
you must agree to sell your goods based on 11 IncoTerms. IncoTerms is short for
International Commercial Terms which are published by
the International Chamber of Commerce and relate to International
Commercial Law. They’re accepted by governments
and legal authorities around the world. Put simply, IncoTerms
are the selling terms the buyer and seller of goods
both agree to before shipping the goods. The IncoTerms clearly state
which tasks, costs and risks are associated with the buyer and which are associated
with the seller. The IncoTerms states
when the seller’s costs and risks are transferred on to the buyer. We’ve put together this simple chart
to display IncoTerms in an easy to understand format. At the top are the different types
of IncoTerms, beginning from left to right. On the left side is the exporter
or the seller of the goods, beginning at the seller’s location
or warehouse. As you move along to the right,
the products leave the warehouse, get loaded on board a vessel
at the port of loading, get shipped through
to the port of destination, get customs cleared
and then delivered further through to the buyers location. Along the way, there is set IncoTerms
to establish which risks and costs are agreed to be
paid by the seller and which are to be
transferred to the buyer. On the left is the first IncoTerm,
EXW, which means X Works or X Warehouse. If the buyer and seller
agree to sell goods on X Works terms, then the seller’s obligation
is very simple. The seller will only cover the cost
of the goods X Warehouse. So, that means, the seller
will manufacture the goods, have them packaged
and ready for collection from their warehouse. From then on,
all additional costs and risks involved in transport
away from the warehouse is covered by the buyer. Moving further along
the supply chain, there are FCA, FAS
and FOB IncoTerms. These three terms
are quite similar but the most popular IncoTerm used
is FOB, Free On Board. When FOB terms are agreed upon,
then the seller’s obligation is to supply the goods and also
to pay for all additional charges to get the goods loaded
on board the vessel for export. So, the seller will cover
all loading charges, inland freight charges to the port,
origin port handling charges, export customs clearance
and origin forwarder fees. As soon as the goods are loaded
on board the vessel, all further associated costs and risks
are transferred on to the buyer. The buyer will pay for the sea freight
and all charges thereafter. If the seller agrees to pay
for the sea freight, then they can choose
to sell the goods on CFR, CIF, CPT or CIP
IncoTerms. These are all quite similar terms. CFR and CPT are very similar
where the seller will agree to pay for the sea freight to ship the goods
to the port of destination. If they agree to sell
on CIF or CIP terms, then the seller will agree to pay
the sea freight and the marine insurance cost
to ship the goods to the port of destination. Moving further along,
the seller can also agree to pay for the local charges
associated at the port of destination, including port charges,
import customs clearance, local import duties and taxes payable
on the goods to import. It’s not as common for a seller
to ship on DAT, DAP or DDP terms but this can also be arranged. If you have any detailed questions
relating to IncoTerms, you should refer
to your freight forwarder. To export your shipment overseas, you will need to provide
your freight forwarder with detailed shipping documentation
that will include the IncoTerms you have agreed to sell the goods. You can use IncoDocs
to quickly and easily create all of the shipping documentations
required to export your goods overseas. Try it for yourself. Go to IncoDocs.com
and start your free trial today.

23 thoughts on “IncoTerms 2010 International Trade Import Export Business Supply Chain Logistics Documents

  1. Aprende a Importar Productos de Marca a Precio
    por Mayor

    Con esta Guia aprenderas a importae productos de
    marcas conocidas a precio x mayor

    Aprenderas a conseguir proveedores de las marcas mas
    conocidas y a precios increibles

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  2. I'm working with an overseas company to export my good. I need everything paid in full up front. Is there an Incoterm for that or how should it be stated?

  3. Importers and Exporters use IncoDocs to make trade easy www.incodocs.com

    You can download the IncoTerms PDF chart here – https://www.incodocs.com/blog/incoterms-2010-import-export-trade-shipping-freight-exw-fca-fas-fob-cfr-cif-cpt-cip-dat-dap-ddp-free-board-works

  4. I appreciate your work.video is very nice.It is very helpful.please be continue and make more videos.

  5. FCA and FAS is wrong explained in this video! FCA means that the buyer has to pay the Origin Port handling! Also concerning the origin Freight forwarder/documentation fee is up to an agreement between buyer and seller for FAS, FCA and FOB. The C-terms are also not appropriate explained as the risk and the costs are splittet! This list is not really thought through.

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