OE Spain neutral N.V.O.C.C. S.L.

Incoterms

Definition

Incoterms (English acronym of International Commercial Terms) are international trade rules designed to establish criteria on four basic aspects of international sales contract, the delivery of goods, transfer risk, the distribution of costs and formalities of customs documents between the buyer and the seller, in an international sales contract.

The International Chamber of Commerce is the agency responsible for the preparation and updating of these terms.

Categorization

Incoterms are organized into four main categories:

  • Group E. The seller makes the goods available to the buyer at the seller's own premises, delivered directly to the output.
  • Group F. The seller is called upon to deliver the goods to a transporter chosen by the purchaser; indirect delivery without payment of the principal transportl.
  • Group C. The seller contracts for carriage but without assuming the risk of loss or damage to the goods or additional costs for events occurring after shipment and dispatch; delivery indirect with payment of principal transport.
  • Group D. The seller bears all costs and risks needed to bring the goods to the country of destination; direct delivery to the arrival.

Incoterms

Shipping

The following table summarizes the terms relating solely to the mode of shipping and how the costs of risks matter for the Seller or Buyer.

IncotermsExport CustomsHandling costsMain carriageInsuranceHandling costsImport Customs
FAS
Free alongside ship
SBBBBB
FOB
Free on board
SSBBBB
CFR
Cost and Freight
SSSBBB
CIF
Cost, Insurance and Freight
SSSSBB
DES
Delivered Ex Ship
SSSSBB
DEQ
Delivered Ex Quay
SSSSSB