Presentation on theme: "Incoterms: International Commercial Terms are contract terms that show transport obligations, costs and risks. When we buy, it tells us: If we have to."— Presentation transcript:
1 Incoterms: International Commercial Terms are contract terms that show transport obligations, costs and risks.When we buy, it tells us:If we have to make logistics arrangements to move the goodsIf we have to make arrangements to clear goods for export and or importWhat is included in our price (freight, duties, import/export fees,etc).If there is a problem in transit, who holds the responsibilityWhen we sell, it tells us:How to price our sales transaction (do we include freight, duties and taxes in our price)Do we have to export clear the shipments, do we have to import clear the shipment?Do we have to make the logistics arrangements?Who is responsibility if there is a problem in transit?It tells us who should be the importer, who selects the broker, who pays the duty and what is in our price
2 Inco terms show the transfer of risk, not title! INCO Terms - International Commercial Terms are contract terms that show transport obligations, costs and risks.Tells us who is Responsible for the Import or Export and who bears the cost of freight, clearance fees and duties!Inco terms show the transfer of risk, not title!Use “named Place”, ie..Exw Houston, USShows responsibilities of buyers and sellersShows who bears the cost associated with each component of the movement (freight costs, agent fees, customs fees and duties)ExW,Buyer must exportClear materialFCA,Our preferredTermsMoving left to right, the sellers responsibilities increase, while the buyers responsibilities decreaseFOBCIFDDU, DDPDDP indicates that the seller should clear the material with their own broker and pay duties and taxes!
3 Use a named place with Inco Terms! Common IncotermsUse a named place with Inco Terms!Origin Terms EXW - Ex-Works, named place where shipment is available to the buyer, not loaded. The seller will not contract for any transportation. Buyer bears all cost and risk involved in taking goods from seller’s premises.International Carriage NOT Paid by Seller FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded. Buyer takes risk of loss at named location.FOB - Free On Board vessel, named ocean port of shipment. Buyer takes risk of loss once goods are on board vessel.International Carriage Paid by the Seller CIF - Cost, Insurance and Freight, named ocean port of destination. Seller completes export process and covers freight and insurance to destination port.Arrival At Stated DestinationDDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared by seller. Buyers obligation is import clearance and duty payment.This term is used for any mode of transportation. DDP - Delivered Duty Paid, named place of destination, unloaded, cleared. Buyer has no involvement with transportation, customs clearance or duty payment.This term is used for any mode of transportation.