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The Incoterms

David Saatchyan Kriheli Mihail

Plan of the presentation

1. Means of The Incoterms

2. History of The Incoterms

3. Main groups

4. Conclusion

Means of The Incoterms

The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods.

History of The Incoterms

The Incoterms rules began development in 1921 with the forming of the idea by the International Chamber of Commerce. In 1936, the first set of the Incoterms rules was published. The first set remained in use for almost 20 years before the second publication in 1953. Additional amendments and expansions followed in 1967, 1976, 1980, 1990 and 2000. The eighth and current version of the Incoterms rules—Incoterms 2010—was published on January 1, 2011

Group 1. The E term (Departure)

EXW. Ex Works (named place of delivery)

This price is the Ex – Works cost of the goods. The buyers arranges collection from the supplier and pays for freight

Group 2. The F term ( Free, main carriage not paid by

the seller)

FCA – Free Carrier (named place of delivery)

The free Carrier price includes all costs to a named point of loading onto a container. The buyer pays for onward shipment and insurance

FAS – Free Alongside Ship (named port of shipment)

This price includes all costs to a named port of shipment. The buyer pays for loading, onward shipment and insurance.

FOB – Free on Board (named port of shipment)

This price includes all costs of the goods Free On Board a ship whose destination is stated in the contract. The buyer pays for onward shipment and insurance

Group 3. The C terms (main carriage paid by the

seller) CPT - Carriage Paid To (named place of destination)

The cost and transportation of the goods, Carriage Paid to a named destination in the buyers country.

CIP – Carriage and Insurance Paid to (named place of destination)

The cost and transportation of the goods, Carriage and Insurance Paid, to a named destination in the buyer’s country

CFR – Cost and Freight (named port of destination)

This price includes Cost and Freight, but not insurance, to a named port of destination in the buyer’s country.

CIF – Cost, Insurance and Freight (named port of destination)

This price covers Cost, Insurance and Freight to a named port of destination in the buyer’s country.

Group 4. The D terms (Delivered/Arrival)

DDP – Delivered Duty Paid (named place of destination)

The cost, insurance and transportation of the goods Delivered Duty Paid to the named port of destination.

DAF – Delivered At Frontier (named place of delivery)

This term can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier.

DES – Delivered Ex Ship (named port of delivery)

The cost, insurance and transportation of the goods Delivered Ex-ship to the named port of destination

DEQ – Delivered Ex Quay (named port of delivery)

This is similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination.

DDU – Delivered Duty Unpaid (named place of destination)

This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale.

Questions

1. What are the Incoterms?

2. When was published the first set of the Incoterms rules?

3. What does FOB mean?

4. What does CIF mean?

True or Fouls

1. The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) rarely used in international commercial transactions.

2. The Incoterms rules began development in 1921 with the forming of the idea by the International Chamber of Commerce.

3. CIF means the price that covers Cost, Insurance and Freight to a named port of destination in the buyer’s country.

4. EXW is the Ex – Works cost of the goods. The buyers arranges collection from the supplier and does not pay for freight

Thank you for attention!