1.EXW (Ex Works)

Definition: The seller makes the goods available at its premises. The buyer takes over all responsibilities, including loading the goods onto the transport vehicle, arranging for export clearance, and paying all transportation and other costs. The risk passes to the buyer as soon as the goods are made available at the seller’s premises.

Example: If a factory in China sells goods under EXW terms, the buyer has to arrange for transportation from the factory gate, handle customs formalities for export, and bear all costs and risks from that point.

2. FCA (Free Carrier)

Definition: The seller is responsible for delivering the goods to the carrier or another person nominated by the buyer at a named place. The seller is also responsible for clearing the goods for export. After delivery to the carrier, the risk of loss or damage to the goods is transferred to the buyer.

Example: At an airport warehouse in Frankfurt (FCA Frankfurt Airport), the seller hands over the goods to the carrier (e.g., a cargo airline). Once the goods are with the carrier, the buyer assumes the risk and is responsible for further transportation costs.

3.CPT (Carriage Paid To)

Definition: The seller is responsible for delivering the goods to the carrier and paying for the carriage to the named destination. The risk of loss or damage to the goods passes from the seller to the buyer when the goods are delivered to the carrier.

Example: In a CPT London contract, the seller pays for the transportation of the goods to London and hands them over to the carrier. From the moment of delivery to the carrier, the buyer bears the risk of loss or damage to the goods.

4.CIP (Carriage and Insurance Paid To)

Definition: The seller is responsible for delivering the goods to the carrier, paying for the carriage to the named destination, and arranging and paying for insurance. The risk of loss or damage to the goods passes from the seller to the buyer when the goods are delivered to the carrier.

Example: For a CIP Tokyo contract, the seller not only arranges for the transportation of the goods to Tokyo and pays for it but also arranges for insurance. The buyer takes over the risk once the goods are delivered to the carrier.

5. DAP (Delivered at Place)

Definition: The seller is responsible for delivering the goods to the named place of destination on the arriving means of transport ready for unloading. The seller bears all risks and costs associated with bringing the goods to the destination, except for unloading. The risk passes to the buyer when the goods are available for unloading at the destination. –

Example: If the contract is DAP at a customer’s warehouse in Sydney, the seller is responsible for getting the goods to the warehouse premises and making them available for unloading. The buyer is responsible for unloading and any costs associated with it.

6. DPU (Delivered at Place Unloaded)

Definition: The seller is responsible for delivering the goods to the named place of destination, unloading the goods from the arriving means of transport. The seller bears all risks and costs of delivery, including unloading. The risk passes to the buyer after the goods are unloaded at the destination.

Example: In a DPU contract to a port terminal in Rotterdam, the seller has to unload the goods at the terminal. After unloading, the risk and further costs are the buyer’s responsibility.

7. DDP (Delivered Duty Paid)

Definition: The seller is responsible for delivering the goods to the named place of destination in the country of import, with all costs (including duties, taxes, and other charges) and risks paid and borne until the goods are made available to the buyer. It’s the maximum obligation for the seller.

Example: For a DDP delivery to a customer’s store in New York, the seller takes care of all transportation, customs clearance, duties, and taxes. The buyer simply takes possession of the goods when they arrive at the store.

8. FAS (Free Alongside Ship)

Definition: The seller is responsible for delivering the goods alongside the vessel at the named port of shipment. The buyer is responsible for loading the goods onto the vessel and all costs and risks associated with the voyage. The risk passes to the buyer when the goods are placed alongside the ship. 

Example: In an FAS Shanghai contract, the seller gets the goods to the quay in Shanghai port alongside the ship. The buyer then arranges for loading the goods onto the vessel and bears the costs and risks of the sea voyage.

9. FOB (Free on Board)

Definition: The seller is responsible for delivering the goods on board the vessel nominated by the buyer at the specified port of shipment. Once the goods are on board the ship, the risk of loss or damage to the goods is transferred from the seller to the buyer. The buyer is then responsible for all costs and risks associated with the transportation of the goods from the port of shipment to the destination.

Example: If a contract stipulates “FOB Qingdao”, the seller must load the goods onto the ship in Qingdao port. After that, the buyer bears the cost of freight, insurance, and any risks during the voyage.

10. CFR (Cost and Freight)

Definition: The seller is responsible for the cost of the goods and the freight to the destination port. The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods pass the ship’s rail at the port of shipment. However, the buyer is responsible for arranging and paying for insurance.

Example: For a CFR London contract, the seller pays for the goods and the freight to London. But the buyer needs to arrange for insurance to protect the goods during the sea journey.

11. CIF (Cost, Insurance and Freight)

Definition: Under CIF terms, the seller is responsible for the cost of the goods, freight to the destination port, and insurance. The seller must arrange for the shipment of the goods and insurance coverage up to the named destination port. The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods pass the ship’s rail at the port of shipment.

Example: In a CIF New York deal, the seller has to cover the cost of the goods, pay for the freight to New York, and arrange for marine insurance. The buyer takes over the risk once the goods are on board the ship at the port of shipment, but the seller has already arranged for insurance to protect the goods during the voyage.

12. DAF (Delivered at Frontier)

Definition: The seller is responsible for delivering the goods to the frontier of the country of export or import (as specified in the contract). The seller bears all risks and costs up to the frontier. The risk passes to the buyer at the frontier.

-Example: In a DAF deal at the border between China and Russia, the seller is responsible for getting the goods to the border checkpoint. Once at the border, the risk and further costs are the buyer’s responsibility.

13. DEQ (Delivered Ex Quay)

Definition: The seller is responsible for delivering the goods to the quay at the port of destination. The seller bears all risks and costs of getting the goods to the quay. The buyer is responsible for unloading the goods and any costs and risks associated with customs clearance and further inland transportation.

Example: In a DEQ contract to a quay in Hamburg port, the seller gets the goods to the quay. The buyer then takes care of unloading and any subsequent operations like customs clearance and inland transportation.