Ib Freight





Incoterms

Here international conditions of sale.

EXW - From Local Production
CIP - Carriage and Insurance Paid To
FAS - Free Ship in Costado
DAT - Delivered at Terminal
FCA - Free Carrier
DAP - Deliver onsite
FOB - Free on Board
DDP - Delivered Duty Paid
CFR - Cost & Freight
CIF - Cost, Insurance & Freight
CPT - Carriage Paid To

* Remarks: The ideal method is for the exporter to carry out negotiations for delivery in the vendor country, given that this way, he is increasing his bargaining power. In other words, the exporter, on assuming responsibilities in negotiations, makes it possible to increase his profit margin. Notwithstanding, there are more INCOTERMS in which the risks arising from international transportation mostly affect the buyer, rather than the vendor. The reasons for this are: the difficulties of transportation encountered up to the present date, which frighten off the vendor, causing him to try and escape from the responsibilities of relieving himelf of the merchandises; and the fact that the vendor is in a less comfortable position for claiming payments from the buyer, once the goods have arrived at the destination. When international commerce terms require that Brazilian businessman sends remittance abroad to pay for expenses to his responsibility according to the INCOTERM negotiated, there is, in general terms, more likelihood that the Secretary of Foreign Trade (SECEX) declares itself favorable to financial remittances.

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EXW – Ex Works (...named place)
Under these terms, the exporter concludes his participation in the negotiation when he packs the merchandise ready for shipment (in a crate, bag, etc.) and makes it available his own address within the specified time. It then falls to the foreign importer to take the measures for collecting the merchandise from the exporter's establishment, for internal transportation, loading for overseas shipment, licensing and the contracting of international freight and insurance, etc. The term "EXW" should not be used when the vendor is not able to obtain, directly or indirectly, the documents needed for exporting the goods. As can be seen, the buyer assumes all risks and costs involved in transporting the merchandise from the place of origin to its destination.

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FCA – FREE CARRIER (...named place)
Under these terms, the vendor (exporter) concludes his obligations on delivery of the merchandise, cleared for export, into the hands of the international transporter assigned by the buyer, at the specified location in the country of origin. It should be noted that the location chosen for delivery has an impact on the obligations for shipment to and discharge of the merchandise at the chosen location. If delivery occurs at the vendor's premises, the vendor is responsible for shipment. If delivery is to take place at any other location, the vendor is not responsible for discharge of the goods. That way, it falls to the buyer (importer) to contract freight procedures and international insurance. Such terms can be utilized for any mode of transport.

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FAS – Free Alongside Ship (...named port of shipment)
Under these terms, vendor's responsibility ends when the merchandise is delivered alongside the transport vessel, at the specified port of loading. The international freight and insurance contract shall be to the account of the buyer. The vendor shall be responsible for clearance of the goods for export. These terms may only be used for water transportation (sea, river or lake).

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FOB – Free on Board (...named port of shipment)
Under these terms, the vendor's responsibility for the merchandise ends once it has crossed the ship's rail, at the port of loading, even though placement of the merchandise on board ship is also, in principal, a task for which the vendor is responsible. The expression FOB requires that the vendor clears the merchandise for exportation. It should be stressed that the international transporter is contracted by the buyer (importer). Hence, for a "FOB" sale, the exporter needs to know what the loading terms agreed upon by the buyer and the ship owner are, in order to verify which party should cover loading expenses for the merchandise. These terms may only be used for waterborne shipments (sea, river or lake).

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CFR – Cost and Freight (...named port of destination)
Under these terms, the vendor assumes all of the costs prior to loading, plus the international freight contract for transporting the merchandise to the port of destination indicated. It should be pointed out that the risks for loss or damage of the goods are transferred from the vendor to the buyer, while still at the port of loading (like the FOB term used for "ship's rail"). In this way, negotiations (strictly speaking, the sale) occur while still in the vendor country. The CFR terms require that the vendor clears the goods for export. These terms may only be used for water transportation (sea, river or lake).

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CIF – Cost, Insurance and Freight (...named port of destination)
Under these terms, the vendor has the same obligations as with the "CFR" mode and, in addition, has to contract marine insurance against risk of damage and loss during transportation. Since the business is still being negotiated in the exporter country (the ship's rail at the port of loading, is the point where the transference of responsibility for the goods occurs), the buyer must observe "CIF" terms and the vendor is only obliged to contract minimum cover insurance. CIF terms require that the vendor clears the goods for export. These terms may only be used for water transportation (sea, river or lake).

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CPT – Carriage Paid to (...named place of destination)
Under these terms, the vendor contracts the freight for transportation of the merchandise to the assigned location. The risks for damage and loss of the merchandise, plus any additional cost incurred for events that occur after delivery of the merchandise to the transporter, are transferred by the vendor to the buyer, when the merchandise is delivered into the hands of the transporter. CPT terms require that the vendor clears the goods for export. These terms can be used for any mode of transportation, including multimodal.

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CIP – Carriage and Insurance Paid to (...named place of destination)
Under these terms, the vendor has the same obligations as those defined for "CPT" and also bears the cost for insurance against risk of damage and loss of the merchandise during international transportation. The buyer should note that, under "CIP" terms, the vendor is only obliged to contract minimum cover insurance, given that the sale (transference of responsibility of the merchandise) is carried out in the vendor country. CIP terms require that the vendor clears the goods for export. These terms can be used for any mode of transportation, including multimodal.

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DAP –Delivered At Place) (...named place of destination)
The seller's responsibility is to make the goods available to the buyer, ready to be discharged, not dealing with formalities for import at the named destination terminal, or other agreed place, assuming the costs and hazards of transportation to the site destination.

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DAT – (Delivered at Terminal) (...named place of destination)
The seller ends its responsibility when placing the goods available to the buyer, not dealing with formalities for import at the named destination terminal, assuming the costs and hazards of transportation to the port of destination and the goods were unloaded.

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DDP – Delivered Duty Paid (...named place of destination)
Under these terms, the vendor shall only fulfilled his obligations when the merchandise has been made available at the specified location in the final destination country, cleared for importation. The vendor shall assume all risks and costs, including duties and taxes and other charges levied in importation. Contrary to "EXW" terms, which presents the minimum amount of obligations to the vendor, the "DDP" mode places the maximum amount of risk on the vendor. "DDP" terms should not be used when the vendor is not able, either directly of indirectly, to obtain the documents needed for importing the merchandise. These terms can be used for any mode of transportation, including multimodal.

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