Delivery Terms 2020

Incoterms (International Commercial Terms) are standard delivery terms established by the International Chamber of Commerce (ICC) to clearly define the responsibilities and costs of each party involved in international sales contracts related to the transportation of goods. Incoterms 2020 is the latest version and has been effective since January 1, 2020. Below are the key delivery terms in Incoterms 2020:

Group E (Departure)

1. EXW (Ex Works)

• Seller’s Responsibilities:
  • Delivery: Make the goods available at the seller’s premises or another named place.
  • Documentation: Provide the commercial invoice or an equivalent document.
  • Export Assistance: Assist the buyer (if necessary) in obtaining export licenses or other official authorization required for the export of the goods.
  • Packaging: Ensure the goods are appropriately packed for transport.
  • Quality Check: Ensure the goods meet the contract’s quantity and quality specifications before delivery.
• Buyer’s Responsibilities:
  • Transport: Arrange and pay for the transport of the goods from the seller’s premises to the final destination.
  • Export and Import Formalities: Handle all export and import formalities, including paying all duties and taxes.
  • Insurance: Arrange and pay for insurance if desired.
  • Risk: Bear all risks involved in taking the goods from the seller’s premises.
  • Loading and Unloading: Handle the loading of the goods and unloading at the destination.

Group F (Main Carriage Unpaid)

2. FCA (Free Carrier)

• Seller’s Responsibilities:
  • Delivery: Deliver the goods to the carrier or another party nominated by the buyer at the agreed place.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Documentation: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the carrier.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Carrier Designation: Inform the seller of the carrier, the time, and the place of delivery.
  • Transport: Arrange and pay for the transport from the point of delivery to the final destination.
  • Risk: Bear the risk once the goods have been delivered to the carrier.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Insurance: Arrange and pay for insurance if desired.

3. FAS (Free Alongside Ship)

• Seller’s Responsibilities:
  • Delivery: Place the goods alongside the vessel at the named port of shipment.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Documentation: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the vessel.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Vessel Notification: Inform the seller of the vessel, the time, and the place for loading.
  • Transport: Arrange and pay for the loading of the goods onto the vessel, international transport, and import formalities.
  • Risk: Bear the risk once the goods are placed alongside the vessel.
  • Insurance: Arrange and pay for insurance if desired.

4. FOB (Free On Board)

• Seller’s Responsibilities:
  • Delivery: Deliver the goods on board the vessel at the named port of shipment.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Documentation: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the vessel.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Vessel Notification: Inform the seller of the vessel, the time, and the place for loading.
  • Transport: Arrange and pay for the international transport and import formalities.
  • Risk: Bear the risk once the goods are delivered on board the vessel.
  • Insurance: Arrange and pay for insurance if desired.

Group C (Main Carriage Paid)

5. CFR (Cost and Freight)

• Seller’s Responsibilities:
  • Transport: Pay the cost of freight to bring the goods to the named port of destination.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Deliver the goods on board the vessel and provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the vessel.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Risk: Bear the risk once the goods are delivered on board the vessel at the port of shipment.
  • Insurance: Arrange and pay for insurance if desired.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the port of destination and pay all costs beyond that point.

6. CIF (Cost, Insurance, and Freight)

• Seller’s Responsibilities:
  • Transport: Pay the cost of freight to bring the goods to the named port of destination.
  • Insurance: Obtain insurance coverage for the goods during transport.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Deliver the goods on board the vessel and provide the commercial invoice, documents for delivery, and insurance certificate.
  • Notification: Notify the buyer of the delivery and provide details of the vessel.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Risk: Bear the risk once the goods are delivered on board the vessel at the port of shipment.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the port of destination and pay all costs beyond that point.

7. CPT (Carriage Paid To)

• Seller’s Responsibilities:
  • Transport: Pay the cost of carriage to bring the goods to the named place of destination.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Deliver the goods to the carrier and provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the carrier.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Risk: Bear the risk once the goods have been delivered to the first carrier.
  • Insurance: Arrange and pay for insurance if desired.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the named place of destination and pay all costs beyond that point.

8. CIP (Carriage and Insurance Paid To)

• Seller’s Responsibilities:
  • Transport: Pay the cost of carriage to bring the goods to the named place of destination.
  • Insurance: Obtain insurance coverage for the goods during transport.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Deliver the goods to the carrier and provide the commercial invoice, documents for delivery, and insurance certificate.
  • Notification: Notify the buyer of the delivery and provide details of the carrier.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Risk: Bear the risk once the goods have been delivered to the first carrier.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the named place of destination and pay all costs beyond that point.

Group D (Arrival)

9. DAP (Delivered At Place)

• Seller’s Responsibilities:
  • Transport: Bear the cost and risk to bring the goods to the named place of destination.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the place.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Unloading: Bear the cost and risk of unloading the goods at the place of destination.
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the named place of destination and pay all costs beyond that point.

10. DPU (Delivered at Place Unloaded)

• Seller’s Responsibilities:
  • Transport and Unloading: Bear the cost and risk to bring the goods to the named place of destination and unload them.
  • Export Formalities: Handle export formalities and bear the related costs.
  • Delivery: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the place.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Import Formalities: Handle import formalities and bear the related costs.
  • Receive Goods: Receive the goods at the named place of destination and pay all costs beyond that point.

11. DDP (Delivered Duty Paid)

• Seller’s Responsibilities:
  • Transport and Delivery: Bear all costs and risks to bring the goods to the named place of destination.
  • Export and Import Formalities: Handle export and import formalities, bearing all costs and duties.
  • Delivery: Provide the commercial invoice and any necessary documents for delivery.
  • Notification: Notify the buyer of the delivery and provide details of the place.
  • Packaging and Marking: Ensure the goods are appropriately packed and marked for transport.
• Buyer’s Responsibilities:
  • Receive Goods: Receive the goods at the named place of destination, without bearing any additional costs.

Important Considerations

• Insurance: CIF and CIP terms require the seller to purchase insurance for the goods. For other terms, the buyer may purchase insurance if needed.
• Customs Formalities: EXW, FCA, FAS, FOB, CFR, CIF, CPT, and CIP terms require the seller to handle export formalities. DAP, DPU, and DDP terms require the seller to handle both export formalities and, depending on the term, import formalities as well.
• Risk and Costs: Risk transfers from the seller to the buyer at different points depending on the term. Buyers and sellers must understand the terms to avoid disputes and misunderstandings.
• Documentation: Ensure all necessary documents are provided to complete the transaction, including the commercial invoice, delivery documents, and insurance certificates (if applicable).

Incoterms 2020 help define the responsibilities and costs of sellers and buyers in international transactions, minimizing risks and disputes. With this detailed and professional information, you can apply Incoterms effectively in your business activities.