Incoterms 2000 Quick Reference

Best Terms for Buyers (our preference and priority in red)

FOB – Free on Board – Ocean only. FOB point must be the origin port. Buyer controls ocean freight routing. Seller must deliver the freight to the named origin port.

2) FCA – Free Carrier – All modes of transportation. Best when used from seller’s premises but can also be from the carrier’s terminal at origin. Unlike FOB the loading charges come forward to the buyer. Buyer controls ocean or air freight routing or, in the case of “FCA seller’s premises”, door to door.

DDU – Delivery Duty Unpaid – All modes of transportation. Seller must deliver all the way to the buyer’s door and is responsible for any loss along the way. Buyer takes care of Customs clearance. This term is based for shipments of replacement parts or when the buyer has little resource to handle international logistics.

1) EXW – Ex Works – All modes of transportation. Buyer takes care of everything once the freight is pushed out of the door of the seller onto a truck. Seller provides documents but the buyer must arrange export formalities at origin (export customs clearance). “FCA seller’s premises” is the preferred term. Buyer controls freight from door to door.

Best Terms for Sellers

CFR – Cost and Freight – Ocean only. CFR point must be a destination ocean port (no inland points allowed, see CPT). Seller controls the freight all the way to the destination port but risk for loss passes to the buyer at the ships rail at origin port.

2) CPT – Carriage Paid To – All modes of transportation. CPT point can be inland or even right to the buyers door. Seller controls the freight all the way to the CPT point but risk for loss passes when the goods are handed over to the carrier. In many cases this happens at the seller’s warehouse as the goods are loaded on the truck.

DDU – Delivery