The following are the thirteen terms of sale in international trade reflected in the amendment
to the International chamber of Commerce Terms of Trade (INCOTERMS), effective July 1990.

1. EXW (Ex Works) (…Named Place): A term of Sale which means that the seller fulfils the obligation
to deliver when he or she has made the goods available at his/her premises (i.e., works, factory, warehouse, etc.) to the buyer. In particular, the seller is not responsible for loading the goods in the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination. This term thus represents the minimum obligation for the seller.

2. FCA (Free Carrier) (… Named Place): A Term of Sale which means the seller fulfils their obligation when he or she has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose, within the place or range stipulated, where the carrier should take the goods into their charge.

3. FAS (Free Alongside Ship) (… Named Port of Shipment): A Term of Sale which means the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from the moment,

4. FOB (Free On Board) (,,, Named Port of Shipment): An International Term of sale that means the seller fulfils his or her obligation to deliver when the goods have passed over the ship’s rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

5. CFR (Cost and Freight) (…Named Port of Destination): A Term of Sale where the seller pays the cost and freight necessary to bring the goods to the named port of destination. Terms of Sale but the risk of loss of or damage to the goods as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment. The CFR term requires the seller to clear the goods for export.

6. CIF (Cost, Insurance and Freight) (… Named Place of Destination): A Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer’s risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.

Continue >>

+ Registered Shippers List
+ Cargo Claims Procedure
+ Shippers Reg. Guidelines
+ Incoterms
+ Daily Shipping Position
+ Authorised Govt. Agencies
+ Documents for Imp./ Exp.
+ Cargo Clearance Process
+ Home

+ Circulars
+ Communiques
+ Publications (Books)
+ Reports
+ Seminars/Workshop Papers
+ Shippers Registration Form