HOURS OF OPERATION
Office time : 9:30am - 18.00pm
+91-22-31591073
Office time : 9:30am - 18.00pm
+91-22-31591073
INCOTERMS (International Commercial terms) help ease the communication difficulties between traders from around the world. They allow the different parties involved in an import/export transaction to be clear at what points ownership and payment responsibilities transfer from one party to the other.
INCOTERMS relate to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold, but excluding “intangibles” like computer software. INCOTERMS are a set of international rules for the interpretation of the 13 trade terms published by the International Chamber of Commerce (ICC).Responsibilities are simply and clearly defined by referring to one of the ICC INCOTERMS. Thus the risk of misunderstanding and subsequent disputes is eliminated.
INCOTERMS 2000 is devided into four groups. They are mainly the E, F, C and D groups.
Is the minimum obligation of a seller. The seller agrees to make the goods available to the buyer at the seller’s premises (named place). The seller is not responsible to bear the cost of loading the goods onto the vehicle provided by the buyer, unless otherwise agreed in advance. The buyer bears the full cost and risks involved in bringing the goods from the EXW location to the ultimate destination.
This is a term designed to meet the needs of multimodal transportation, and is ideally suited when a buyer has named a transportation intermediary to take control of their cargo prior to loading on board a vessel, aircraft, barge, etc.
Under FCA the seller has fulfilled its obligation to deliver when he had handed over the goods to the charge of the carrier named by the buyer at the (named place). The buyer pays for the transportation.
The seller is required to deliver the goods alongside the actual ship on the pier/quay. From that point forward, the buyer bears all cost (loading cost, freight, insurance etc) and risk. Under FAS terms, the buyer is required to clear the goods for export and pay the cost of loading the goods. This is commonly used for shipments of large items via breakbulk and charter.
Goods shipped under FOB terms are placed on board the ship by the seller at the specific port of shipment named in the sales agreement/contract. All costs and risks from the point where the cargo “crosses the ship’s rail” passes to the buyer.
The title and risks change at the ship’s rail, just as in FOB terms, but the cost allocation is different. For goods shipped under CFR, the seller pays all costs to deliver the goods up to the named port of destination (while under the FOB, the buyer is responsible for these costs).
The seller has the same obligations as he has under the CFR term, except that now the seller has the additional responsibility to procure cargo insurance against the cargo’s risk of loss or damage during the carriage.
As a general note on cargo insurance, the cargo must have at least a minimum coverage under the Institute Cargo Clause or any similar set of clauses. As a rule, the amount of the insurance should correspond to the price provided in the contract plus 10 per cent; and where possible be in the currency of the contract.
The buyer will bear all risks from the time the cargo passes over the ship’s rail at the port of shipment. This term is only used for sea shipment.
Seller pays the freight for the carriage of the goods to the named destination. The buyer pays for the insurance. The passing of risk occurs when the goods have been delivered into the custody of the first carrier. This term requires the seller to clear the goods for export. It may be used for any mode of transport including multimodal transportation.
This is CPT plus insurance. However, in the CIP term, seller has the additional responsibility to procure cargo insurance against the buyer’s risk of loss or damage to the goods during the carriage.