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Questions and Answers
What is the buyer responsible for under Ex Works (EXW)?
What is the buyer responsible for under Ex Works (EXW)?
Which term requires the seller to deliver goods to a named carrier at a specified location?
Which term requires the seller to deliver goods to a named carrier at a specified location?
For Free Alongside Ship (FAS), what is the seller's main responsibility?
For Free Alongside Ship (FAS), what is the seller's main responsibility?
Under which Incoterm does the seller deliver goods on board the ship and pay for transportation to the destination port?
Under which Incoterm does the seller deliver goods on board the ship and pay for transportation to the destination port?
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What is a buyer responsible for under Free on Board (FOB)?
What is a buyer responsible for under Free on Board (FOB)?
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Which Incoterm requires the seller to pay for the transportation to the named port of destination but not the insurance?
Which Incoterm requires the seller to pay for the transportation to the named port of destination but not the insurance?
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Under Free Carrier (FCA), at what point does the buyer's responsibility begin?
Under Free Carrier (FCA), at what point does the buyer's responsibility begin?
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Which of these Incoterms places the least amount of responsibility on the seller regarding transportation and insurance?
Which of these Incoterms places the least amount of responsibility on the seller regarding transportation and insurance?
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At whose premises does the seller's responsibility end under Ex Works (EXW)?
At whose premises does the seller's responsibility end under Ex Works (EXW)?
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What is the main difference between Free Carrier (FCA) and Free Alongside Ship (FAS)?
What is the main difference between Free Carrier (FCA) and Free Alongside Ship (FAS)?
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Under FAS, who is responsible for loading the goods?
Under FAS, who is responsible for loading the goods?
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What is the seller's responsibility under FOB?
What is the seller's responsibility under FOB?
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Under CFR, who pays for transport?
Under CFR, who pays for transport?
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What is the main difference between CFR and CIF?
What is the main difference between CFR and CIF?
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Under EXW, what is the buyer responsible for?
Under EXW, what is the buyer responsible for?
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What is the main similarity between FCA and FAS?
What is the main similarity between FCA and FAS?
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Under FOB, who is responsible for insurance?
Under FOB, who is responsible for insurance?
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What is the seller's responsibility under FCA?
What is the seller's responsibility under FCA?
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Who is responsible for export clearance under FCA?
Who is responsible for export clearance under FCA?
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What is the named place where the buyer's responsibility begins under FCA?
What is the named place where the buyer's responsibility begins under FCA?
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Under EXW, who is responsible for arranging and paying for transportation?
Under EXW, who is responsible for arranging and paying for transportation?
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What is the difference between FAS and FOB?
What is the difference between FAS and FOB?
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Under CFR, who is responsible for insurance?
Under CFR, who is responsible for insurance?
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Who delivers the goods alongside the ship at the named port of shipment under FAS?
Who delivers the goods alongside the ship at the named port of shipment under FAS?
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What is the main responsibility of the seller under EXW?
What is the main responsibility of the seller under EXW?
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Under FOB, who is responsible for all costs and risks from the moment the goods are on board the ship?
Under FOB, who is responsible for all costs and risks from the moment the goods are on board the ship?
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What is the named port of shipment where the seller delivers the goods under FOB?
What is the named port of shipment where the seller delivers the goods under FOB?
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Under FCA, who is responsible for transportation and insurance from the named place?
Under FCA, who is responsible for transportation and insurance from the named place?
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Study Notes
Incoterms
Incoterms are a set of three-letter trade terms published by the International Chamber of Commerce (ICC) that clarify the responsibilities of buyers and sellers in international trade.
Overview of Incoterms
EXW - Ex Works
- Seller's responsibility: Make the goods available at their premises or factory.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance.
FCA - Free Carrier
- Seller's responsibility: Deliver the goods to a named carrier at a specified location.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance from the carrier's location.
FAS - Free Alongside Ship
- Seller's responsibility: Deliver the goods alongside the ship at the named port of departure.
- Buyer's responsibility: Arrange and pay for loading, transportation, insurance, and customs clearance.
FOB - Free on Board
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance from the port of departure.
CFR - Cost and Freight
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure and pay for transportation to the named port of destination.
- Buyer's responsibility: Arrange and pay for insurance and customs clearance.
CIF - Cost, Insurance, and Freight
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure, pay for transportation to the named port of destination, and arrange insurance.
- Buyer's responsibility: Arrange and pay for customs clearance.
CPT - Carriage Paid To
- Seller's responsibility: Deliver the goods to a named carrier at a specified location and pay for transportation to the named destination.
- Buyer's responsibility: Arrange and pay for insurance and customs clearance.
CIP - Carriage and Insurance Paid To
- Seller's responsibility: Deliver the goods to a named carrier at a specified location, pay for transportation to the named destination, and arrange insurance.
- Buyer's responsibility: Arrange and pay for customs clearance.
Note: The Incoterms rules are revised every 10 years, and the latest version is Incoterms 2020.
Incoterms
- A set of three-letter trade terms published by the International Chamber of Commerce (ICC) that clarify the responsibilities of buyers and sellers in international trade.
Overview of Incoterms
- Incoterms rules are revised every 10 years, with the latest version being Incoterms 2020.
EXW - Ex Works
- Seller's responsibility: Make the goods available at their premises or factory.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance.
FCA - Free Carrier
- Seller's responsibility: Deliver the goods to a named carrier at a specified location.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance from the carrier's location.
FAS - Free Alongside Ship
- Seller's responsibility: Deliver the goods alongside the ship at the named port of departure.
- Buyer's responsibility: Arrange and pay for loading, transportation, insurance, and customs clearance.
FOB - Free on Board
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure.
- Buyer's responsibility: Arrange and pay for transportation, insurance, and customs clearance from the port of departure.
CFR - Cost and Freight
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure and pay for transportation to the named port of destination.
- Buyer's responsibility: Arrange and pay for insurance and customs clearance.
CIF - Cost, Insurance, and Freight
- Seller's responsibility: Deliver the goods on board the ship at the named port of departure, pay for transportation to the named port of destination, and arrange insurance.
- Buyer's responsibility: Arrange and pay for customs clearance.
CPT - Carriage Paid To
- Seller's responsibility: Deliver the goods to a named carrier at a specified location and pay for transportation to the named destination.
- Buyer's responsibility: Arrange and pay for insurance and customs clearance.
CIP - Carriage and Insurance Paid To
- Seller's responsibility: Deliver the goods to a named carrier at a specified location, pay for transportation to the named destination, and arrange insurance.
- Buyer's responsibility: Arrange and pay for customs clearance.
Incoterms
Seller's Responsibility
- EXW (Ex Works)
- Seller's responsibility limited to making goods available at their premises
- Buyer bears all costs and risks from that point on
- No obligation for the seller to load the goods
Main Carriage Unpaid
- FAS (Free Alongside Ship)
- Seller's responsibility ends when goods are placed alongside the ship
- Buyer responsible for loading and all subsequent costs and risks
- Seller does not bear any costs or risks during transport
- FOB (Free on Board)
- Seller's responsibility ends when goods are on board the ship
- Buyer responsible for all subsequent costs and risks
- Seller must ensure goods are safely on board the ship
Main Carriage Paid
- CFR (Cost and Freight)
- Seller's responsibility ends when goods are on board the ship
- Seller pays for transport costs, but buyer bears all risks
- Seller must ensure goods are safely on board the ship
- CIF (Cost, Insurance, and Freight)
- Seller's responsibility ends when goods are on board the ship
- Seller pays for transport costs and insurance
- Seller bears all risks until goods are on board the ship
Multimodal Transport
- CPT (Carriage Paid To)
- Seller's responsibility ends when goods are handed over to a carrier
- Seller pays for transport costs, but buyer bears all risks
- Seller must ensure goods are safely handed over to the carrier
- CIP (Carriage and Insurance Paid To)
- Seller's responsibility ends when goods are handed over to a carrier
- Seller pays for transport costs and insurance
- Seller bears all risks until goods are handed over to the carrier
Incoterms
- Incoterms are a set of three-letter trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade.
EXW (Ex Works)
- Seller's only obligation is to make the goods available at their premises.
- Buyer is responsible for all costs and risks from the seller's premises to the final destination.
- Buyer must arrange and pay for transportation and insurance.
FCA (Free Carrier)
- Seller delivers the goods to a carrier or another person nominated by the buyer at the seller's premises or another named place.
- Seller is responsible for export clearance.
- Buyer is responsible for transportation and insurance from the named place.
FAS (Free Alongside Ship)
- Seller delivers the goods alongside the ship at the named port of shipment.
- Seller is responsible for export clearance.
- Buyer is responsible for loading the goods onto the ship and all costs and risks from that point on.
FOB (Free on Board)
- Seller delivers the goods on board the ship at the named port of shipment.
- Seller is responsible for export clearance.
- Buyer is responsible for all costs and risks from the moment the goods are on board the ship.
CFR (Cost and Freight)
- Seller delivers the goods on board the ship at the named port of shipment and pays for transportation to the named port of destination.
- Seller is responsible for export clearance.
- Buyer is responsible for insurance and all costs and risks from the named port of destination.
CIF (Cost, Insurance, and Freight)
- Seller delivers the goods on board the ship at the named port of shipment, pays for transportation to the named port of destination, and obtains insurance.
- Seller is responsible for export clearance.
- Buyer is responsible for all costs and risks from the named port of destination.
CPT (Carriage Paid To)
- Seller delivers the goods to a carrier or another person nominated by the seller at the named place.
- Seller pays for transportation to the named place of destination.
- Buyer is responsible for insurance and all costs and risks from the named place of destination.
CIP (Carriage and Insurance Paid To)
- Seller delivers the goods to a carrier or another person nominated by the seller at the named place.
- Seller pays for transportation and insurance to the named place of destination.
- Buyer is responsible for all costs and risks from the named place of destination.
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Description
Learn about Incoterms, a set of three-letter trade terms published by the International Chamber of Commerce (ICC) that clarify the responsibilities of buyers and sellers in international trade.
