Now to Group C incoterms.

Terms from this group have one thing in common, they

are all terms used when the seller can arrange to pay all the fees up to delivery at a
foreign port.
Here's what they mean:
1. CFR: Cost and Freight, aka C&F, aka CNF
Definition: This acronym means that the seller covers all the costs of bringing goods
from their origin to the port of destination, including carriage costs and clearing the
goods for export except for the insurance.[1]
Note: Even though the seller takes care of the actual loading and transportation of
goods up to the port of destination, the buyer pays the insurance (and therefore
assumes the risk) from the moment the goods are loaded onto the vessel at the port of
origin throughout their transit to the port of destination and beyond.[2] This term is
used exclusively for maritime and inland waterway trade.
2. CIF: Cost Insurance and Freight
Definition: This term is identical to the one preceding it with exception for the
insurance portion. With a CIF arrangement, the seller (not the buyer) assumes the risk
(and therefore is responsible for purchasing insurance) for the goods during transit
from origin to the port of destination.
Note: This term too applies solely to maritime and inland waterway trade. However,
CIF may not be appropriate where the goods are handed over to the carrier before they
are loaded on the vessel - the usual container scenario.[3]
3. CPT: Carriage Paid To, aka DPC
Definition: This term indicates that the seller assumes most of the cost of
transportation of the goods including export fees, carriage charges, and fees at the port
of destination. Seller does not pay for insurance - that is the buyers obligation.
Note: The moment that the risk of loss or damage is transferred from seller to buyer is
when the goods are loaded onto the first carrier vessel, despite the seller paying the

carriage charges.[4] CPT can be used for all modes of transportation, including
container or roll-on roll-off traffic.[5]
4. CIP: Carriage and Insurance Paid To
Definition: Carriage and insurance paid is much like CPT in that the seller assumes
most of the costs of transportation including export fees, carriage charges, and fees at
port of destination. For CIP arrangements, however, the seller is responsible for
purchasing insurance for the goods during the carriage.[6]
Note: While the seller is required to buy insurance for the carriage, the risk of loss or
damage is transferred from seller to buyer when the goods are loaded onto the first
carrier vessel.[7] CIP can be used for all modes of transport but is most common for
intermodal (i.e. container) shipping.[8]

Group E abbreviations start with E and cover departure of goods. Group F abbreviations all start with an F
and are characterized by the main costs being covered by the buyer.
Click here for an incoterms quick reference guide from your friends here at UCM, but then head on back
to this page for the detailed explanation of the terms.
1. EXW: Ex (Latin for out of or from) Works; i.e. goods available from the place of production.
Definition: EXW is usually followed by a place name[1], such as EXW Portland and means essentially
that the seller will make the goods available to the buyer at a specified place, i.e. the sellers
premises/warehouse/works/factory, and at a specified time. This fulfills the sellers obligations leaving
the buyer to load the goods onto whatever transportation has been arranged, clear the goods for export,
and bear all the risk during transport.
Caveat: Alternate arrangements can be made, such as the seller agreeing to load the goods and assume
the risks of such loading, etc. Any such deviation must be made explicit in the contract.
Note: When getting an initial price quote for goods, you are usually quoted the price for an Ex Works
arrangement, that is, the price of the goods not including shipping, loading, insurance or any of the other
costs likely to apply.[2] Therefore, Ex Works translates into the arrangement carrying the minimum
obligation and risk for the seller and the maximum obligation and risk assumption for the buyer. Ex Works
applies exclusively to air, rail, road, and containerized/multimodal transport.[3]
2. FCA: Free Carrier

Definition: FCA is usually followed by a place name the initial destination of the goods, FCA Anchorage
for example. Not surprisingly, this term is also referred to as named place delivery. Under the terms of
FCA, it is the sellers obligation to hand the goods over to the first carrier at the named place once they
have been cleared for export. Using our earlier example, the seller would have fulfilled their obligation
once the goods had been cleared for export and delivered from the sellers warehouse (lets say) to the
carrier waiting at the port of Anchorage. At this point the buyer assumes the risks and costs of any further
transport executed by the first carrier.
Note: Sometimes, no specific place of delivery is where the goods will change hands and be delivered
into the hands of the carrier within the range specified in the contract.[4] FCA represents an incremental
increase in the cost and obligation to the seller over the EXW arrangement. Because the seller owns the
good right up to delivery, FCA arrangements allow the seller to resell the goods to someone else while the
goods are still in transit. Free Carrier applies exclusively to air, rail, road, and containerized/multimodal
transport.[5]
3.FAS: Free Alongside Ship
Definition: Free Alongside Ship means what it sounds like, that the seller must transport the goods all the
way to the dock, close enough to be reached by the crane of the ship it will be transported in.[6] Also it is
the sellers responsibility to clear the goods for export (this is an innovation from the 2000 version of
Incoterms, when buyers had to take care of port fees)[7]. FAS is usually followed by a place name, for
example FAS San Francisco. The place name indicates the port where the goods are to be delivered on
the quay beside the carrier ship.
Note: Not surprisingly, FAS applies exclusively to maritime and inland waterway shipping. However it
does notapply to goods packaged in shipping containers. FAS is instead usually used for goods sold as
bulk cargo, such as petroleum products or grain.[8]
4. FOB: Free Onboard Vessel
Definition: Free Onboard Vessel is sort of a hybrid, where the seller is obligated to bring the goods all the
way to the port, clear the goods for export, AND see that they are loaded onto the ship nominated by the
buyer. Once the goods clear the railing of the vessel the buyer assumes the risk.[9] FOB is often followed
by the named loading port thus: FOB Long Beach, meaning the seller delivers the goods, pays the port
fees, and sees the goods loaded onto the ship docked (in this case) at the port of Long Beach.
Note: This Incoterm is used exclusively for maritime and inland waterway transport but not for container
shipping.[10]

Today's Incoterms are brought to you by the letter D.

D is for Delivery.
Too Sesame Street? Then let's get right into the final installment of the Incoterms explanation blog series.

If you missed the last few blogs, click here for Group C Incoterms definitions, click here for Group E and
Group F Incoterms, or click here for an introduction to Incoterms.
I might miss writing about these little tigers.
Here is where the simplification of 2010 really comes into play. The D group describes different methods
of delivery of goods and represents the arrangements with the maximum amount of responsibility (both
for costs and risks) to the seller, not the buyer. There used to be 5 acronyms in the D group total. Now
there are only 3.
Previously, there were 3 terms used to indicate where goods were to be delivered, i.e. DAF, Delivered at
Frontier"; DES, "Delivered Ex Ship"; DEQ, "Delivered at Quay. Now those 3 terms have been simplified.
The delivery location is now identified simply as DAT or DAP Delivered at Terminal or Delivered at
Place. The reasoning is that the increase in point-to-point sales and containerization made the other
terms obsolete.[1]
Lastly, the term DDUP Delivery Duty Unpaid - has been eliminated completely.[2] I guess there's no
getting out of paying duty which leaves the term DDP Delivery Duty Paid.
Look out because plenty of websites are still sporting the old terms and presumably still wresting with the
ambiguities caused by the old terms. You want to be careful because these ambiguities can muddle your
international shipping agreement and cost you more than you calculated!
Now for the final Incoterms and their definitions.
1.

DAT Delivered at Terminal

Definition: This term means that the seller covers all the costs of transport (export fees, carriage,
insurance, and destination port charges) and assumes all risk until after the goods are unloaded at the
terminal.[3]Terminal includes any place, whether covered or not, such as a quay, warehouse, container
yard or road, rail or air cargo terminal.[4] The buyer covers the cost of transporting the goods from the
terminal or port to final destination and pays the import duty/taxes/customs costs.
Note: With this arrangement, the seller assumes a large portion of the risks and costs of transport. This
term applies to any mode of transport.
1.

DAP - Delivered at Place

Definition: This term means that the seller pays all the costs of transportation (export fees, carriage,
insurance, and destination port charges) up to and including the delivery of the goods to the final
destination. The buyer is responsible to pay only the import duty/taxes/customs costs. The buyer also is
responsible to unload the goods from the vehicle at the final destination.[5]
Note: The big difference between DAP and DAT is that with DAP the seller is responsible for the final leg
of the journey and the buyer is responsible for the final unloading of the goods. This term applies to any
mode of transport.
1.

DDP Delivered Duty Paid

Definition: This term means that the seller assumes all the risks and costs of transport (export fees,
carriage, insurance, and destination port charges, delivery to the final destination) and pays any import
customs/duty.[6]The buyer has only to unload the goods at the final destination.[7]
Note: AKA the non-Incoterm "Free In Store (FIS), DDP represents maximum responsibility for both costs
and risk assumption from beginning to end to the seller. This arrangement is the opposite end of the
spectrum from ExWorks (EXW) where the majority of the cost and risk assumption is on the shoulders of
the buyer.[8] This term applies to any mode of transport.