Incoterms 2010 II   (back / more)

incoterms

Some Notations in Incoterms 2010

  1. Deliver and procure - In the sale of commodities, cargo is frequently sold several times during transit down a string. So, a seller in the middle of the string does not ship the goods because these have already been shipped by the first seller in the string. The said seller performs its obligations towards its buyer not by shipping the goods, but by procuring goods that have been shipped. For clarification purposes, Incoterms 2010 rules include the obligation to procure goods shipped as an alternative to the obligation to ship goods in the relevant Incoterms rules.
  2. For the sea rules of Incoterms (such as, FOB, CFR, and CIF), all mention of the ships rail as the point of delivery has been omitted in preference to the goods being delivered when they are on board the vessel. This more closely reflects modern commercial reality and avoids the rather dated image of risk swinging to and from across an imaginary perpendicular line (ship?s rail).

Incoterms 2010 Classified

The number of terms in is decreased from 13 (as in Incoterms 2000) to 11 due to integrating DAF (Delivered at land Frontier), DES (Delivered Ex Ship), and DDU (Delivered Duty Unpaid) as DAP (Delivered At Place).

Table 1: Rules of Incoterms 2010 Classified by Modes of Transport and Kind of Delivery Contract
Group E - Departure Group F - Main Carriage Non Paid Group C - Main Carriage Paid Group D - Arrival
Rules for Any Modes of Transport EXW FCA CPT, CIP DAT, DAP, DDP
Rules for Sea and Inland Waterway Transport FAS, FOB CFR, CIF

Table 2: Main Seller's and Buyer's Respesobilities/Risks by INCOTERMS 2010 Groups

Seller Buyer

Group F (FCA , FAS, FOB) is considered to be Shipment Contracts and Buyer Friendly

  • Handles Export Clearance (if any)
  • Handles Pre-carriage
  • Named Place on Sellers Side
  • Contracts for Main Carriage
  • In charge of Carrier (and usually forwarder) selection
  • Control over Freight Costs
  • Control of Documentation

Group C (CPT ,CIP, CFR, CIF) is considered to be Shipment Contracts and Seller Friendly

  • Contracts for Main Carriage
  • In charge of carrier (and usually forwarder) selection
  • Handles pre-carriage
  • Has control over freight costs
  • In control of documentation
  • Passes risk of loss (delivers) to Buyer prior main carriage
  • Handles export clearance
  • Has risk of loss while goods are in transit with carrier selected and paid for by seller
  • Must rely heavily on Seller for data elements required for ocean shipments
  • Named Place is on Buyers side

Group D (DAT ,DAP, DDP) is considered to be Arrival Contracts

  • Contracts for Main Carriage
  • In charge of carrier (and usually forwarder) selection
  • Handles pre-carriage
  • Has control over freight costs
  • In control of documentation
  • Passes risk of loss (delivers) to Buyer at freight arrival point
  • Handles export (import DDP case) clearance
  • Has risk of loss while goods are in transit with carrier selected and paid for by seller
  • Must rely heavily on Seller for data elements required for ocean shipments.
  • Named Place is on Buyers side

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