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Incoterms

International Commercial Terms Guide

Understanding Incoterms is crucial for international trade. These standardized terms define the responsibilities of buyers and sellers in international transactions, clarifying who pays for what and where the risk transfers.

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International Commercial Terms Guide

Incoterms Rules & Definitions

Detailed explanations of each Incoterm rule, including risk transfer points and responsibilities.

EXW

Ex Works

The risk passes when the seller makes the cargo available to the buyer. The buyer is responsible for the transportation and must cover freight and insurance costs.

FCA

Free Carrier

The risk passes when the seller has delivered the cargo at the location where the buyer or the buyer's carrier is to pick up the cargo.

CPT

Carriage Paid To

The risk passes to the buyer when the seller has delivered the cargo to the buyer's carrier.

CIP

Carriage and Insurance Paid To

The risk passes when the seller has delivered the cargo to the buyer's carrier, as in CPT. In CIP, the seller is also responsible for covering the transport and insurance costs.

DAP

Delivered at Place

The seller is responsible for transporting the cargo to the agreed location. When the cargo is ready for unloading, the risk passes to the buyer.

DPU

Delivered at Place Unloaded

The seller is responsible for transporting the cargo to the agreed location, just like in DAP. The difference here is that the seller is responsible for unloading and the risk only passes to the buyer once this is done.

DDP

Delivered Duty Paid

The seller carries the risk until the cargo delivered to the buyer. Here, all responsibility lies with the seller, while the seller also covers all transportation and insurance costs.

FAS

Free Alongside Ship

The seller delivers the goods alongside the ship at the named port of shipment. The buyer bears all costs and risks from that moment.

FOB

Free on Board

The risk passes when the seller has loaded the cargo onto the buyer's transport vessel. From here, the risk is transferred to the buyer, who carries the risk during the rest of the transport. This Incoterm only applies to sea freight.

CFR

Cost and Freight

The seller carries the risk until the ship has sailed into port with the cargo. From there, the risk passes to the buyer, while the buyer is responsible for unloading the cargo at the final destination. This Incoterm only applies to sea freight.

CIF

Cost, Insurance and Freight

The seller is responsible for covering the insurance costs as well as the responsibility for bringing the cargo to the port with the buyer, just like the transfer of risk in the CFR. From here, the risk passes to the buyer. This Incoterm only applies to sea freight.

Why Incoterms Matter?

Clarify responsibilities between buyer and seller

Determine cost allocation and risk transfer points

Reduce misunderstandings in international trade

Ensure compliance with international standards

Need Help Understanding Incoterms?

Our logistics experts can help you choose the right Incoterms for your specific shipment and ensure smooth international trade operations.

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