Must Know Industry Knowledge
As of January 1st, 2011, the “Incoterms® 2010” International Trade Regulations will be officially implemented. The new version of the International Trade Regulations has been reduced from the original 13 to 11.
That is, DAF, DES, DEQ, and DDU are deleted, but DAT and DAP are added. The new international trade regulations are divided into:
| EXW (EX WORKS): add the delivery conditions and specify the place of delivery.
It means that the seller prepares the goods for the buyer only at its own location, and at the buyer’s expense. |
| FCA (FREE CARRIER): The condition of delivery to the carrier is filled with the specified place of delivery.
The seller only delivers the goods to the designated carrier at the agreed delivery place, and bears the risks and expenses incurred before that; the buyer bears the risks and expenses incurred after that |
| FAS (FREE ALONGSIDE SHIP): Delivery Aside Ship Condition Filling Designated Port of Loading.
The seller delivers the goods to the designated port of shipment and the buyer specifies the ship side, and bears the risks and expenses (including export customs clearance procedures and expenses) incurred before this time; the buyer bears the risks and expenses incurred after this. |
| FOB (FREE ON BOARD): Delivery on board plus the specified port of shipment.
The seller shall be responsible for loading the goods on the ship designated by the buyer at the designated port of shipment within the agreed time, and shall bear the risks and expenses incurred before this; the buyer shall bear the risks and expenses after that. |
| CFR (COST AND FREIGHT): Fill in the specified destination port with the freight included.
The seller loads the goods on the ship designated by the buyer at the designated port of shipment, and bears the risks, expenses and sea freight incurred before the goods are transported to the destination port; the buyer bears the risks and expenses after that. |
| CIF (COST INSURANCE AND FREIGHT): Fill in the specified port of destination with the conditions of freight and insurance.
The seller loads the goods on the ship designated by the buyer at the designated port of shipment, and bears the risks, costs and sea freight and insurance costs incurred before the goods are transported to the port of destination; the buyer bears the risks after that, along with the fees. |
| CPT (CARRIAGE PAID TO): add the specified destination to the freight payment condition.
The seller delivers the goods to the designated carrier at the agreed place, and bears the risks, expenses and freight incurred before the goods are transported to the designated destination; the buyer bears the risks and expenses after that. |
| CIP (CARRIAGE AND INSURANCE PAID TO): Add the specified destination to the shipping and insurance payment conditions.
The seller delivers the goods to the designated carrier at the agreed place, and bears the risks, costs and freight and insurance costs incurred before the goods are transported to the designated destination; the buyer bears the risks and costs after that. |
| DAP (DELIVERED AT PLACE): destination delivery condition plus specified destination.
The seller will deliver the goods to the designated destination, and will prepare the goods for unloading on the means of transport for the buyer’s disposal, and bear the risks and expenses incurred before this, but does not include import customs clearance procedures and payable taxes (duties) and government fees; the buyer bears all risks and expenses thereafter. |
| DAT (DELIVERED AT TERMINAL): the terminal delivery condition plus the destination port or the designated terminal of the destination.
The seller delivers the goods to the designated destination port or destination terminal, and unloads the goods for the buyer’s disposal, and bears the risks and expenses incurred before this; the buyer bears all the risks and expenses incurred after this. |
| DDP (DELIVERED DUTY PAID): Delivery at Terminal.
The seller shall bear all costs and risks required to deliver the goods to the country of destination. |