ICOTERMS or International commercial terms refer to a series of international sales terms widely used throughout the world in day to day commercial transactions. They are used to determine transaction costs and responsibilities between buyer and seller and reflect expectations of both parties during transportation and/or delivery of goods. They closely correspond to the U.N. Convention on Contracts for the International Sale of Goods.

INCOTERMS stipulate conditions and responsibilities of the buyer and seller for such important aspects that include the pick-up, shipping of products, export, import clearance and delivery. Incoterms do not deal with transfer of title.

INCOTERMS are devised and published by the International Chamber of Commerce (ICC). The English text is the original and official version of Incoterms 2000, which have been endorsed by the United Nations Commission on International Trade Law.


Group E – Departure:


  • EXW: Ex Works (named place): the seller makes the goods available at his premises.


Group F – Main Carriage Unpaid:


  • FCAFree Carrier (named place): the seller hands over the goods, cleared for export, into the custody of the first carrier (named by the buyer) at the named place. This term is suitable for all modes of transport, including carriage by air, rail, road, and containerized / multi-modal transport.
  • FAS: Free Alongside Ship (named loading port): free Alongside Ship: the seller must place the goods alongside the ship at the named port. The seller must clear the goods for export; this changed in the 2000 version of the Incoterms. Suitable for maritime transport only.
  • FOB: Free On Board (named loading port): this is the classic maritime trade term, Free On Board: seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship’s rail. The seller must clear the goods for export. Maritime transport only.


Group C – Main Carriage Paid:

  • CFR: Cost and Freight (named destination port): Seller must pay the costs and freight to bring the consignment to the port of destination. However, risk is transferred to the buyer once the goods have crossed the ship’s rail. Maritime transport only.
  • CIF: Cost, Insurance and Freight (named destination port): exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only.
  • CPT: Carriage Paid To (named place of destination): the general/containerized/multimodal equivalent of CFR. The seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier.
  • CIP: Carriage and Insurance Paid to (named place of destination): the containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.


Group D – Arrival


  • DAF: Delivered At Frontier (named place). Seller to deliver the goods to a designated border crossing. DAF is primarily used for rail and road transportation. However, it can be used for any form of transport system.
  • DES: Delivered Ex Ship (named port). Seller to deliver the goods at a buyer at an agreed port of arrival. The obligation of seller ends when the non-cleared goods have been delivered to the buyer aboard the vessel in the designated port of destination. The seller bears the full risks and costs in connection with the transport to that port of destination.
  • DAT: Delivered At Terminal (named port): Seller is responsible for arranging carriage and for delivering the goods, unloaded from the arriving means of transport, at the named place. It can be used for any transport mode, or where there is more than one transport mode
  • DDU: Delivered Duty Unpaid (named destination place): Seller is responsible for ensuring goods arrive safely to a specified destination; the buyer is responsible for import duties. 
  • DDP: Delivered Duty Paid (named destination place). Seller must cover duties, import clearance, and any taxes. The responsibility, risk, and costs associated with transporting goods until the buyer receives them at the port or named destination are to the account of the seller.