insight
know your incoterms
The Incoterms are a set of commercial/trade rules established by the International Chamber of Commerce (“ICC”) that are used in international sale contracts, a set of 11 globally recognized standard trade terms to facilitate domestic and international B2B sales of goods.
The Incoterms® 2020 rules are updated and grouped into two categories reflecting modes of transport. Of the 11 rules, there are seven for ANY mode(s) of transport and four for SEA or LAND or INLAND WATERWAY transport.
The seven Incoterms® 2020 rules for any mode(s) of transport are:
EXW - Ex Works (insert place of delivery)
FCA - Free Carrier (Insert named place of delivery)
CPT - Carriage Paid to (insert place of destination)
CIP - Carriage and Insurance Paid To (insert place of destination)
DAP - Delivered at Place (insert named place of destination)
DPU - Delivered at Place Unloaded (insert of place of destination)
DDP - Delivered Duty Paid (Insert place of destination).
Note: the DPU Incoterms replaces the old DAT, with additional requirements for the seller to unload the goods from the arriving means of transport.
The four Incoterms® 2020 rules for Sea and Inland Waterway Transport are:
FAS - Free Alongside Ship (insert name of port of loading)
FOB - Free on Board (insert named port of loading)
CFR - Cost and Freight (insert named port of destination)
CIF - Cost Insurance and Freight (insert named port of destination)
*For additional information and resources on the Incoterms® 2020 rules, please visit the official ICC website for further information.
FAMOUS QUOTES
“You won’t find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics”
— General Dwight. D. Eisenhower
