A) Rules Covering All Transportation Types
EXW-Ex Works (Delivery at Work)
The seller notifies the buyer by keeping the goods ready in their facilities for the order of the buyer on the previously specified date. The buyer prepares the necessary documents for the export of the goods from the enterprise and completes the customs procedures and imports the goods to their own country. All the costs and risks related to the goods are covered by the buyer following the delivery of the goods in the enterprise.
FCA – Free Carrier
The seller shall be considered to have completed the delivery procedures as soon as they transfer the goods to the supervision of the first carrier on the specified date and place after having completed the customs procedures. From this moment on, all the expenses and risks related to the goods shall be transferred to the buyer. The price of the freight is paid by the buyer as well all the expenses.
CPT – Carriage Paid To
The seller is obliged to pay the freight fee until the destination. From the moment they transfer the goods to the supervision of the first carrier, all risks and expenses other than the freight are transferred to the buyer.
CIP – Carriage And Insurance Paid To
Carriage And Insurance Paid To The seller has the same obligations as CPT. However, they have to provide cargo insurance against the risk of loss or damage during the transport of the goods.
DAT – Delivered At Terminal
This is the release of the merchandise to the order of the buyer at the terminal point established by the buyer and the seller (such point may be a port or a customs warehouse or the buyer's factory) with the unloading costs covered by the seller. All the customs transactions, costs, taxes, duties, and fees arising from customs shall be borne by the buyer.
DAP – Delivered At Place
It is the release of the merchandise to the order of the buyer at the unloading site established by the buyer and the seller (a port pier, customs point, airport) on the transportation vehicle in a condition ready for unloading. All the customs transactions, costs, taxes, duties, and fees arising from customs shall be borne by the buyer. The seller undertakes the costs of transportation to the specified place/terminal-related damage risks of the goods.
DDP – Delivered Duty Paid
The seller prepares the goods in accordance with the terms of the contract. They prepare the necessary documents to be used in their own and the buyer's country. They complete the customs procedures for the exports and imports. They provide the transportation vehicle and pay the freight fee. All the costs and risks related to the goods until delivery are borne by the seller. Delivery is carried out by paying the customs taxes in the country of the buyer at the place and date established. The buyer pays the price of goods in accordance with the contract terms and receives the delivery of the goods.
B) Rules Specific to Sea and Inland Water Transportation
FAS – Free Alongside Ship
The delivery obligation of the seller ends when the goods are placed on the pier or the barge at alongside the ship at the established port. The loading, unloading, transportation, and insurance costs of the goods are paid by the buyer.
FOB – Free on Board
The seller carries out the loading of the goods on the vessel provided by the buyer on the established date and place. Any and all the damages, losses, and expenses that might occur after the goods have been transferred to the handrail (board) of the vessel is under the responsibility of the buyer. The seller prepares all the documents required for export and delivers the goods after having completed the customs procedures.
CFR – Cost and Freight
The seller undertakes all the costs and risks and delivers the goods to the port where they shall be loaded. They have the customs procedures made and carry out the loading after paying the freight fee. From this moment on, all the expenses and risks related to the goods outside the freight belong to the buyer.
CIF – Cost, Insurance and Freight
The seller undertakes the insurance premium, freight, and loading costs and risks and delivers the goods to the port where they shall be loaded. The seller contracts with the ship agency and provides the vessel. They notify the buyer that the goods in the sales contract have been loaded at the established date and place. The seller shall have the narrowest comprehensive marine transportation insurance appropriate for the type of the goods loaded by paying the insurance premium. After the goods have been loaded on the vessel, the costs and risks other than the freight and insurance premium are transferred to the buyer.