Incoterms - Page 2

INCOTERMS DAP

INCOTERMS 2020 | DAP – DELIVERED AT PLACE

DAP, short for “Delivered at Place”, means that the exporter is obligated to load the goods onto the collecting vehicle and deliver to the importer at the agreed point of delivery or destination not unloaded.

DAP is used in any mode of transportation. Export clearance is the liability of the exporter, while import clearance and all related customs formalities are carried out by the importer. 

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INCOTERMS 2020 | CIP – CARRIAGE AND INSURANCE PAID TO

CIP, short for “Carriage and Insurance Paid to”, means the exporter is obligated to load the goods to the first carrier and pay the insurance and freight to the agreed destination in the importer’s country.

It’s noteworthy that the exporter is not responsible for the risks of the goods’ transportation; it just pays the insurance and freight. All the risks transfer to the importer upon the goods’ loading at the exporter’s premises or any other agreed place. CIP is used in all modes of Transport.

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INCOTERMS-CPT

INCOTERMS 2020 | CPT – CARRIAGE PAID TO

CPT, short for “Carriage Paid To”, means the exporter is obligated to load the goods to the first carrier and pay the freight to the agreed destination in the importer’s country. It’s critical to know that the exporter is not responsible for the risks of the goods’ transportation; it just pays the freight and it’s done, all the risks transfer to the importer upon the goods’ loading at the exporter’s premises or any other agreed place. CPT is used in all modes of Transport.

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INCOTERMS-FCA

INCOTERMS 2020 | FCA – FREE CARRIER

FCA, short for “Free carrier”, means that the exporter has to deliver the goods to the importer’s collecting vehicle at the point of delivery, which can be at the exporter’s premises or another point that’s been specified in the contract of sale. If the delivery point is the exporter’s premises, then the responsibility of loading the goods on the vehicle belongs to the exporter. If the delivery point is another place than the exporter’s premises, the exporter transports the goods to the designated place/port and from that point on, unloading is the importer’s responsibility. At this point all the risks transfer to the importer. 

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INCOTERMS-EXW

INCOTERMS 2020 | EX WORKS – EXW

Ex Works is obviously the best Incoterms rule for exporters. If you are new to foreign trade, you’d better agree on the term EXW with your buyer as you’ll bear no risk for anything including customs formalities but to make the goods ready at the named place of delivery with required documents like commercial invoice. However it’s not always a desirable choice for importers. Let’s explore the definition of EXW and the responsibilities of both sides.

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