EXW (Ex Work) this term implies the obligations of the seller to make the goods available under his terms. The seller is not responsible for loading the goods on a vehicle provided by the purchasing party, which then bears all the costs involved in bringing the goods to the desired destination.
In the FOB term the goods are placed on board of the ship by the seller at the port of cargo, mentioned in the sales agreement. The risk of loss or damage to the goods is transferred to the buyer when the goods are loaded on board the ship, train, etc. In this case the seller makes the payment for the shipment of the goods.
In the FCA term the seller fulfills his obligations on delivery of the goods, ready for export, to the carrier appointed by the buyer to the designated place. Unless an exact point is indicated by the buyer, the seller may choose within the specified place or interval where the carrier will pick up the goods in his charge.
FAS means that the seller is responsible for the cost of transporting and delivering the goods to the ship at a port in his State. Since the buyer is responsible for the export, this is not a usable incoterm for US exports. FAS should only be used for ocean consignments as risk and liability are transmitted from seller to buyer when the goods are placed within the crane’s capabilities.
The CFR terms require the seller to pay the costs and transportation necessary to bring the goods to the said destination, but the risk of loss or damage to the goods, as well as any cost increases, is borne by the seller to the buyer when the goods are unloaded from the ship at the port of unloading. Insurance is the responsibility of the buyer.
The terms CIF represent Cost, Insurance and Transport. CIF is similar to CFR with the additional requirement that the seller purchases insurance against the risk of loss or damage to the goods. The seller must pay the premium. Insurance is important in international transportation, rather than American domestic transportation, because U.S. laws generally hold the carrier responsible for lost or damaged goods.
The CPT means that the seller must pay for the carriage of the goods to the said destination. The risk of loss or damage to the goods and any increase in cost is transferred from the seller to the buyer when the goods are delivered to the first carrier and not to the quay.
CIP has the same meaning as CPT incoterm, but in addition the seller pays for the loss insurance.
DAF means that the seller’s liability is complete when the goods have arrived at the border but before the customs border of the country mentioned in the contract of sale. This buyer is responsible for the cost of the goods for customs duties.
The seller must pay the costs involved in transporting the goods, as well as the costs and risks of completing the customs formalities. The seller pays the customs duties and the buyer must pay any additional costs if the goods are not cleared in time. DDP is not used in cases where the seller does not have an import license.
The seller has to bear the costs involved in shipping the goods as well as the costs and risks of carrying out customs formalities. The buyer pays the duty and has to pay any additional costs caused by its failure to clear the goods for import in time.