Glossary of Terms
The delivery terms that appear on quotations, contracts and invoices, and what each one settles: who arranges carriage, where risk passes from seller to buyer, and which modes of transport it suits.
Rules for any mode(s) of transport
| Term | Full name | Who arranges carriage | Where risk passes | Modes |
|---|---|---|---|---|
| EXW | Ex Works (named place of delivery) | Buyer. The buyer pays all transportation costs. | At the seller’s premises. The buyer bears the risks of bringing the goods to their final destination, and any loading by the seller is at the buyer’s risk and cost. | Any mode(s) of transport. |
| FCA | Free Carrier (named place of delivery) | Seller, who pays for carriage to the named place of delivery. | When the goods are handed over to the first carrier. | Any mode(s) of transport. |
| CPT | Carriage Paid to (named place of destination) | Seller, who pays for carriage. | On handing the goods over to the first carrier. | Any mode(s) of transport. |
| CIP | Carriage and Insurance Paid to (named place of destination) | Seller, who pays for carriage and insurance to the named destination point. | When the goods are handed over to the first carrier. | Any mode(s) of transport. The multimodal equivalent of CIF. |
| DAT | Delivered at Terminal (named terminal at port or place of destination) | Seller, to the terminal, except for costs related to import clearance. | Once the goods are unloaded at the terminal. | Any mode(s) of transport. |
| DAP | Delivered at Place (named place of destination) | Seller, to the named place, except for costs related to import clearance. | At the point the goods are ready for unloading by the buyer. | Any mode(s) of transport. |
| DDP | Delivered Duty Paid (named place of destination) | Seller, to the named place in the buyer’s country, and all costs of bringing the goods there including import duties and taxes. | Not stated on this page. The buyer is responsible for unloading. | Any mode(s) of transport. |
EXW: Ex Works (named place of delivery)
The seller makes the goods available at its premises. The buyer is responsible for unloading. This term places the maximum obligation on the buyer and minimum obligation on the seller. The Ex Works term is often used when making an initial quotation for sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and does not clear them for export. If the seller does load the goods, he does so at the buyer’s risk and cost. If parties wish the seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.
FCA: Free Carrier (named place of delivery)
The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The seller pays for carriage to the named place of delivery, and risk passes when the goods are handed over to the first carrier.
CPT: Carriage Paid to (named place of destination)
The seller pays for carriage. Risk transfers to the buyer upon handing the goods over to the first carrier.
CIP: Carriage and Insurance Paid to (named place of destination)
The containerised transport and multimodal equivalent of CIF. The seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.
DAT: Delivered at Terminal (named terminal at port or place of destination)
The seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.
DAP: Delivered at Place (named place of destination)
The seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.
DDP: Delivered Duty Paid (named place of destination)
The seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The buyer is responsible for unloading. This term is often used in place of the non-Incoterm “Free In Store (FIS)”. This term places the maximum obligations on the seller and minimum obligations on the buyer.
Rules for sea and inland waterway transport
| Term | Full name | Who arranges carriage | Where risk passes | Modes |
|---|---|---|---|---|
| FAS | Free Alongside Ship (named port of shipment) | Not stated on this page. The seller must place the goods alongside the ship at the named port and clear them for export. | Not stated on this page. | Maritime only, and not for multimodal sea transport in containers. Typically used for heavy-lift or bulk cargo. |
| FOB | Free on Board (named port of shipment) | Buyer nominates the vessel. The seller must load the goods on board it and clear them for export. | When the goods are actually on board the vessel. | Maritime and inland waterway only, and not for multimodal sea transport in containers. |
| CFR | Cost and Freight (named port of destination) | Seller, who must pay the costs and freight to the port of destination. Insurance is not included. | Once the goods are loaded on the vessel. | Maritime transport only. |
| CIF | Cost, Insurance and Freight (named port of destination) | Seller, as for CFR, and the seller must in addition procure and pay for insurance. | As for CFR, once the goods are loaded on the vessel. | Maritime transport only. |
FAS: Free Alongside Ship (named port of shipment)
The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but not for multimodal sea transport in containers. This term is typically used for heavy-lift or bulk cargo.
FOB: Free on Board (named port of shipment)
The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board the vessel. The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only, but not for multimodal sea transport in containers. The buyer must instruct the seller on the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder.
CFR: Cost and Freight (named port of destination)
The seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Maritime transport only, and insurance for the goods is not included. This term was formerly known as CNF (C&F).
CIF: Cost, Insurance and Freight (named port of destination)
Exactly the same as CFR, except that the seller must in addition procure and pay for insurance. Maritime transport only.
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