Glossary of shipping terms
This short guide to shipping terms/Incoterms aims to help the sellers and buyer allocate their risks and costs during the transportation of freight for international trade. Visit the ICC site, for a full list of Incoterms.
Ex Works (EXW)
The seller makes the goods available to be collected at their premises and the buyer is responsible for transport, duties and taxes from that point onwards.
Free Carrier (FCA)
The seller gives the goods, cleared for export, to the buyer’s carrier at a specified place. The buyer is responsible for transport, duties and taxes from that point onwards.
Free on Board (FOB)
The seller pays the costs incurred up to cargo loaded onto ship, container, aircraft. The buyer is responsible for transport, duties and taxes from that point onwards.
Delivered at Frontier (DAF)
The seller pays the transport costs to arrival the specified border point. The buyer is responsible for transport, duties and taxes from that point onwards.
Carriage Paid To (CPT)
The seller pays to transport the goods to the specified destination. The buyer is responsible for transport, duties and taxes from that point onwards.
Carriage and Insurance Paid (CIP)
The same as CPT except the seller also pays for insurance to the specified destination.
Cost & Freight (CFR)
The seller pays the costs up to arrival foreign port. The buyer is responsible for transport, duties and taxes from that point onwards.
Cost, Insurance & Freight (CIF)
The same as CFR except the seller also pays for insurance to the arrival foreign port.
Delivered Duty Paid (DDP)
The seller pays the costs to delivered the buyer’s domicile including customs clearance, duties and taxes.
Delivered Domicile Uncleared (DDU)
The seller pays the costs to delivered the buyer’s domicile. The buyer pays for customs clearance, duties and taxes.
Delivered at Place Unloaded (DPU)
The seller pays the transport costs to unloaded the specified point. The buyer is responsible for the transport, duties and taxes from that point onwards.
Delivered at Place (DAP)
As for DPU but the buyer is responsible for all the costs relating to the unloading of the goods.
