Click on the abbreviations below for a complete description.
Ex W -
FOB Airport -
C & F
"Ex works" means the seller's only responsibility is to make the goods available
at the seller's premises, i.e., the works or factory. The seller is not responsible for
loading the goods on the vehicle provided by the buyer unless otherwise agreed. The buyer
bears the full costs and risk involved in bringing the goods from there to the desired
destination. Ex works represents the minimum obligation of the seller.
FCA or Free Carrier
This term has been designed to meet the requirements of multimodal transport, such as
container or roll-on, roll-off traffic by trailers and ferries. It is based on the same
name principle as F.O.B. (free on board), except the seller fulfills its obligations when
the goods are delivered to the custody of the carrier at the named point. If no precise
point can be named at the time of the contract of sale, the parties should refer to the
place where the carrier should take the goods into its charge. The risk of loss or damage
to the goods is transferred from seller to buyer at that time and not at the ship's rail.
The term "carrier" means any person by whom or in whose name a contract of
carriage by road, rail, air, sea, or a combination of modes has been made. When a seller
has been furnished a bill of lading, way bill or carrier's receipt, the seller duly
fulfills its obligation by presenting such a document issued by a carrier.
FOR or FOT
"F.O.R." and "F.O.T." mean "free on rail" or "free on
truck." Both refer to goods being carried by rail and should only be used when the
goods are carried by rail. The risk of loss or damage is transferred when the goods are
loaded onto the rail.
"F.A.S." or "free alongside ship" requires the seller to deliver the
goods alongside the ship on the quay. From that point on, the buyer bears all costs and
risks of loss and damage to the goods. Unlike F.O.B., F.A.S. requires the buyer to clear
the goods for export and pay the cost of loading the goods.
Under "F.O.B." or "free on board," the goods are placed on board the
ship by the seller at a port of shipment named in the sales agreement. The risk of loss of
or damage to the goods is transferred to the buyer when the goods pass the ship's rail
(i.e., off the dock and placed on the ship). The seller pays the cost of loading the
This term is very similar to the ordinary F.O.B. term. The seller fulfills its obligation
by delivering the goods to the air carrier at the airport of departure. The risk of loss
is transferred from the seller to the buyer at such time.
C & F
"C. & F." or "cost and freight" (also abbreviated CFR)
requires the seller to pay the costs and freight necessary to bring the goods to the named
destination, but the risk of loss or damage to the goods, as well as any cost increases,
are transferred from the seller to the buyer when the goods pass the ship's rail in the
port of shipment. Insurance is the buyer's responsibility.
"C.I.F."-- meaning "cost, insurance, and freight"--is C. & F. with
the additional requirement that the seller procure transport insurance against the risk of
loss or damage to goods. The seller must contract with the insurer and pay the insurance
premium. Insurance is generally more important in international shipping than domestic
shipping, because U.S. laws generally hold a common carrier to be liable for lost or
CPT or Freight/Carriage Paid To
This term means the seller pays the freight for the carriage of the goods to the named
destination. The risk of loss or damage to the goods and any cost increases transfers from
the seller to the buyer when the goods have been delivered to the custody of the first
carrier, and not at the ship's rail. Accordingly, "freight/carriage paid to" can
be used for all modes of transportation, including container or roll-on roll-off traffic
by trailers and ferries. When the seller is required to furnish a bill of lading, way
bill, or carrier receipt, the seller duly fulfills its obligation by presenting such a
document issued by the person contracted with for carriage to the main destination.
CIP or Freight/Carriage and Insurance Paid To
This term is the same as "freight/carriage paid to" but with the additional
requirement that the seller has to procure transport insurance against the risk of loss or
damage to the goods during the carriage. The seller contracts with the insurer and pays
the insurance premium.
DES Ex Ship
"Ex ship" means the seller shall make the goods available to the buyer on board
the ship at the destination named in the sales contract. The seller bears the full cost
and risk involved in bringing the goods there. The cost of unloading the goods and any
customs duties must be paid by the buyer.
DEQ Ex Quay
"Ex quay" means the seller has agreed to make the goods available to the buyer
on the quay or the wharf at the destination named in the sales contract. The seller bears
the full cost and risks in delivering the goods to that point including unloading. There
are two variations of ex quay contracts: "ex quay duty paid" and "ex quay
duty on buyer's account." In the first, the duty is paid by the seller. In the
second, the duty also is paid by the seller, but the buyer must reimburse the seller.
DAF or Delivered at Frontier
"Delivered at frontier" means that the seller's obligations are fulfilled when
the goods have arrived at the frontier but before the customs border of the country named
in the sales contract. The term is primarily used when goods are carried by rail or truck.
The seller bears the full cost and risk in delivering the goods up to this point, but the
buyer must arrange and pay for the goods to clear customs.
DDP or Delivery/Duty Paid
"Delivery/duty paid" represents the seller's maximum obligation. The term
"DDP." is generally followed by words indicating the buyer's premises. It notes
that the seller bears all risks and all costs until the goods are delivered. This term can
be used irrespective of the mode of transport. If the parties wish to make clear that the
seller is not responsible for certain costs, additional word should be added (for example,
"delivered duty paid exclusive of VAT and/or taxes").
DDU or Delivery Duty Unpaid
Delivered duty paid.
Under these terms, the seller fulfills his obligation to deliver when the goods have
been available to the buyer uncleared for import at the point or place of the named
destination. The seller bears all costs and risks involved in bringing the goods to the
point or place of named destination. There is no obligation for import clearance.
For a more complete discussion of the various Incoterms and their uses, the ICC Publishing
Corporation, Inc., 156 Fifth Avenue, Suite 820, New York, N.Y., publishes Incoterms
(No. 350), which discusses the actual ICC rules for the use of these terms, and The
Guide to Incoterms (No. 354), which provides illustrations and diagrams clearly
setting forth the responsibilities of the buyer and the seller under each of the