Shipping Terms or Incoterms

Below is the simplified explaination of the shipping terms used.

EXW (Ex Works)
Seller arrange for shipment available for Buyer’s collection.

The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.
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FOB (Free On Board)
Seller deliver the goods at named port of shipment and clear the goods for export
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
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CFR (Cost and Freight)
Seller pays the costs and freight necessary to bring the goods to the named port of destination and clear the goods for export. But the damage of good is transferred to buyer upon onboard of vessel.

The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
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CIF (Cost, Insurance and Freight)
Same as under CFR terms, seller has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage.

The buyer has to arrange import & delivery to destination
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DDU (Delivered Duty Unpaid)
Seller has to bear all cost (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities.

The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.
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FCA (Free Carrier)
Seller arrange for shipment available for Buyer’s collection.
Cleared for export to named place or point by buyer.

Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
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FAS (Free Alongside Ship)
Seller deliver the goods & placed alongside the vessel on the quay or in lighters at the named port of shipment.

Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
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CPT (Carriage Paid To)
Seller pays the freight for the carriage of the goods to the named destination and to clear the goods for export. Risk of loss or damage to the goods is transfer to buyer after custody of 1st carrier/forwarder.

The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
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CIP (Carriage and Insurance Paid To)
Same as under CPT terms, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage.

The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The buyer has to arrange import & delivery at destination
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DAF (Delivered At Frontier)
Seller deliver the goods, cleared for export, at the named point and placed at the frontier, but before the customs Terms of Sale border of the adjoining country.

The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
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DDP (Delivered Duty paid)
Seller deliver the goods at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation.

Buyer do not need to bear any cost.
(this term is the opposite of EX-WORK TERM)
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DES (Delivered Ex Ship)
Seller to deliver the goods on board the ship, all the costs and risks involved in bringing the goods to the named port destination.

The buyer has to arrange import, duties & taxes & delivery at destination

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DEQ (Delivered Ex Quay, [Duty Paid])
The seller has to bear all risks and costs including duties, taxes and other charges of the goods to the buyer on the quay (wharf) at the named port of destination, cleared for importation.

The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.