Understanding Popular Incoterms by Mode of Transport
When trading internationally, Incoterms are crucial for buyers and sellers, setting clear rules for shipping. Let’s break down which Incoterms are most commonly used, depending on how your goods are being transported:
Note on Maritime Transportation Incoterms:
For ocean freight, terms like FAS, FOB, CFR, and CIF are crucial as they specify the responsibilities regarding delivery, costs, and risks when shipping by sea.
Air Freight Forwarding Incoterms:
Air shipments often involve EXW, FCA, CPT, CIP, which clarify the division of delivery responsibilities and risk management.
Ground Transportation Incoterms:
For land shipments, terms such as EXW, FCA, CPT, CIP, and DAP are key in defining who handles delivery and assumes risks during transit.
Make sure to choose the correct Incoterms for your shipment to ensure that all parties are clear about their obligations.
Incoterms Across Different Transport Methods:
- EXW (Ex Works): Fits all transport types.
- FCA (Free Carrier): Universal across modes.
- CPT (Carriage Paid To): Works for all.
- CIP (Carriage and Insurance Paid to): Good for any transport.
- DPU (Delivered at Place Unloaded): Versatile for all modes.
- DDP (Delivered Duty Paid): Applicable to all.
Maritime-Specific Incoterms:
- FAS (Free Alongside Ship): Used for sea and inland waterway.
- FOB (Free On Board): Ideal for sea and inland waterway.
- CFR (Cost and Freight): Sea and inland waterway transport.
- CIF (Cost, Insurance, and Freight): Tailored for sea shipping.
Incoterms Exclusive to International Ocean Shipping
For sea transport, terms like FAS, FOB, CFR, CIF, DES (Delivered Ex Ship), and DEQ (Delivered Ex Quay) outline specific seller and buyer responsibilities, including delivery, risks, and insurance.
Incoterms for International Air Freight:
Air shipments often use EXW, FCA, plus CPT and CIP, which define the roles in delivery and risk handling.
Incoterms for International Road /Ground Transport:
For road or rail, besides EXW and FCA, DAP (Delivered at Place) and DDP outline the delivery and risk responsibilities.
These Incoterms are key to a smooth international trade process, ensuring both parties understand their obligations for transport, costs, risk, and customs duties.
Further Reading
Full Container Shipping From China
Shipping Cost From China to USA
Shipping Freight From China to Singapore
Freight From China to Malaysia
How to choose Air freight Forwarder
How to select the ideal logistics partner in China
How to cancel or change customs declaration for import and exports goods from China
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