Incoterms: International Commercial Terms are contract terms that show transport obligations, costs and risks. When we buy, it tells us: If we have to make logistics arrangements to move the goods If we have to make arrangements to clear goods for export and or import What is included in our price (freight, duties, import/export fees,etc). If there is a problem in transit, who holds the responsibility When we sell, it tells us: How to price our sales transaction (do we include freight, duties and taxes in our price) Do we have to export clear the shipments, do we have to import clear the shipment? Do we have to make the logistics arrangements? Who is responsibility if there is a problem in transit? It tells us who should be the importer, who selects the broker, who pays the duty and what is in our price

Inco terms show the transfer of risk, not title! INCO Terms - International Commercial Terms are contract terms that show transport obligations, costs and risks. Tells us who is Responsible for the Import or Export and who bears the cost of freight, clearance fees and duties! Inco terms show the transfer of risk, not title! Use “named Place”, ie..Exw Houston, US Shows responsibilities of buyers and sellers Shows who bears the cost associated with each component of the movement (freight costs, agent fees, customs fees and duties) ExW, Buyer must export Clear material FCA, Our preferred Terms Moving left to right, the sellers responsibilities increase, while the buyers responsibilities decrease FOB CIF DDU, DDP DDP indicates that the seller should clear the material with their own broker and pay duties and taxes!

Use a named place with Inco Terms! Common Incoterms Use a named place with Inco Terms! Origin Terms EXW - Ex-Works, named place where shipment is available to the buyer, not loaded. The seller will not contract for any transportation. Buyer bears all cost and risk involved in taking goods from seller’s premises. International Carriage NOT Paid by Seller FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded. Buyer takes risk of loss at named location. FOB - Free On Board vessel, named ocean port of shipment. Buyer takes risk of loss once goods are on board vessel. International Carriage Paid by the Seller CIF - Cost, Insurance and Freight, named ocean port of destination. Seller completes export process and covers freight and insurance to destination port. Arrival At Stated Destination DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared by seller. Buyers obligation is import clearance and duty payment. This term is used for any mode of transportation. DDP - Delivered Duty Paid, named place of destination, unloaded, cleared. Buyer has no involvement with transportation, customs clearance or duty payment. This term is used for any mode of transportation.

INCOTERMS 2000 CHART OF RESPONSIBILITY Seller warehouse labor change at origin storage at point of origin Seller up to delivery unloading at port of import Buyer; when material at border Buyer; when mat'l placed on plane handed to carrier at time of pick up passed the ship's rail at port of export on ship Buyer, when along side ship ready at seller's risk of loss named port of destination named place Services Delivered Duty Paid Duty Unpaid Delivered ex Quay ( duty paid) Ship Delivered at Frontier Carriage & Insurance Paid Carriage Paid To Cost , Insurance & Freight Cost and Free on Board Free Alongside Free Carrier Ex Work and DDP DDU DEQ DES destination named port of named place Services Delivedred Duty Paid Delivered Duty Unpaid Delivered ex Quay ( duty paid) Ship Delivered at Frontier Carriage & Insurance Paid Carrieage Paid To Cost , Insurance & Freight Cost and Free on Board Free Alongside ship Free Carrier Ex Work and DDP DDU DEQ DES DAF CIP CPT CIF CFR FOB FAS FCA EXW Incoterms Seller Buyer customs duties and taxes abroad delivery charges to final charges in foreing port Incoterms EXW FCA FAS FOB CFR CIF CPT CIP DAF Seller Buyer loading at the point of origin export packing warehouse labor change at origin storage at point of Seller up to delivery unloading at port of import Buyer; when material at border Buyer; when mat'l placed on plane handed to carrier at time of pick up passed the ship's rail at port of export on ship Buyer, when along side ship ready at seller's risk of loss named port of destination named place Seller Buyer ocean freight loading on ocean carrier forwarding fees port receiving charges inland freight loading at the point of origin export packing Seller Buyer customs duties and taxes abroad delivery charges to final destination charges in foreing port ocean freight loading on ocean carrier forwarding fees receiving charges inland freight http://www.i-b-t.net/incoterms.html