{"id":3234,"date":"2020-12-03T12:09:49","date_gmt":"2020-12-03T17:09:49","guid":{"rendered":"https:\/\/www.goexport.ca\/?p=3234"},"modified":"2021-03-29T15:10:44","modified_gmt":"2021-03-29T19:10:44","slug":"incoterms-rules-2020","status":"publish","type":"post","link":"https:\/\/www.goexport.ca\/en\/incoterms-rules-2020\/","title":{"rendered":"Understanding Incoterms\u00a0"},"content":{"rendered":"<h1 style=\"text-align: center;\">Understanding Incoterms<\/h1>\n<p>&nbsp;<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><span lang=\"EN-US\"><strong>EXW, FOB, CIP, FCA\u2026<\/strong> You\u2019ve probably heard some of these terms in the past, but do you really know what they mean? The word Incoterm, which stands for\u00a0<\/span><\/span><b>in<\/b>ternational\u00a0<b>co<\/b><\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">mmerce\u00a0<\/span><b><span xml:lang=\"EN-US\" data-contrast=\"auto\">terms<\/span><\/b><span xml:lang=\"EN-US\" data-contrast=\"auto\">\u00a0defines the different types\u00a0<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">of\u00a0<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">agreements between a buyer and seller when exchanging goods from one country to the other. These\u00a0<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">include<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">:<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">\u00a0who handles transportation, who pays for what and most importantly, when the risk is transferred.\u00a0<\/span><\/p>\n<div><\/div>\n<p><strong>Here is a brief overview of the 11 possible Incoterms to help you make a clear decision when negotiating with an international buyer.<\/strong><\/p>\n\n\t\t\t<!-- START Incoterms REVOLUTION SLIDER 6.6.15 --><p class=\"rs-p-wp-fix\"><\/p>\n\t\t\t<rs-module-wrap id=\"rev_slider_7_1_wrapper\" data-source=\"gallery\" style=\"visibility:hidden;background:transparent;padding:0;margin:0px auto;margin-top:0;margin-bottom:0;\">\n\t\t\t\t<rs-module id=\"rev_slider_7_1\" style=\"\" data-version=\"6.6.15\">\n\t\t\t\t\t<rs-slides style=\"overflow: hidden; position: absolute;\">\n\t\t\t\t\t\t<rs-slide style=\"position: absolute;\" data-key=\"rs-38\" data-title=\"Slide\" data-thumb=\"\/\/www.goexport.ca\/wp-content\/uploads\/2020\/12\/INCOTERMS-2020-_-schema-MULTIMODAUX-EN_V3-50x100.png\" data-anim=\"adpr:false;ms:1230;\" data-in=\"o:0;\" data-out=\"a:false;\">\n\t\t\t\t\t\t\t<img src=\"\/\/www.goexport.ca\/wp-content\/plugins\/revslider\/public\/assets\/assets\/dummy.png\" alt=\"\" title=\"INCOTERMS-2020-_-sch\u00e9ma-MULTIMODAUX-EN_V3\" width=\"2000\" height=\"1500\" class=\"rev-slidebg tp-rs-img rs-lazyload\" data-lazyload=\"\/\/www.goexport.ca\/wp-content\/uploads\/2020\/12\/INCOTERMS-2020-_-schema-MULTIMODAUX-EN_V3.png\" data-bg=\"f:60% 60%;\" data-no-retina>\n<!---->\t\t\t\t\t\t<\/rs-slide>\n\t\t\t\t\t\t<rs-slide style=\"position: absolute;\" data-key=\"rs-39\" data-title=\"Slide\" data-thumb=\"\/\/www.goexport.ca\/wp-content\/uploads\/2020\/12\/INCOTERMS-2020-_-schema-MARITIMES-EN_V3-50x100.png\" data-anim=\"adpr:false;ms:1230;\" data-in=\"o:0;\" data-out=\"a:false;\">\n\t\t\t\t\t\t\t<img src=\"\/\/www.goexport.ca\/wp-content\/plugins\/revslider\/public\/assets\/assets\/dummy.png\" alt=\"\" title=\"INCOTERMS-2020-_-sch\u00e9ma-MARITIMES-EN_V3\" width=\"2000\" height=\"1500\" class=\"rev-slidebg tp-rs-img rs-lazyload\" data-lazyload=\"\/\/www.goexport.ca\/wp-content\/uploads\/2020\/12\/INCOTERMS-2020-_-schema-MARITIMES-EN_V3.png\" data-bg=\"f:60% 60%;\" data-no-retina>\n<!---->\t\t\t\t\t\t<\/rs-slide>\n\t\t\t\t\t<\/rs-slides>\n\t\t\t\t<\/rs-module>\n\t\t\t\t<script>\n\t\t\t\t\tsetREVStartSize({c: 'rev_slider_7_1',rl:[1240,1024,778,480],el:[900,768,960,720],gw:[1240,1024,777,650],gh:[900,768,530,600],type:'standard',justify:'',layout:'fullwidth',mh:\"0\"});if (window.RS_MODULES!==undefined && window.RS_MODULES.modules!==undefined && window.RS_MODULES.modules[\"revslider71\"]!==undefined) {window.RS_MODULES.modules[\"revslider71\"].once = false;window.revapi7 = undefined;if (window.RS_MODULES.checkMinimal!==undefined) window.RS_MODULES.checkMinimal()}\n\t\t\t\t<\/script>\n\t\t\t<\/rs-module-wrap>\n\t\t\t<!-- END REVOLUTION SLIDER -->\n\n<h3><span data-contrast=\"auto\"><strong>Applicable to\u00a0<u>all means of transportation <\/u>\u202f<\/strong><\/span><\/h3>\n<p><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">EXW \u2013\u00a0<strong>ExWorks<\/strong><\/span><\/b><\/span><\/span><\/p>\n<p><span data-contrast=\"auto\">ExWorks\u00a0means all the risk and costs are assumed by the buyer. The seller only has to place the goods at the buyer\u2019s disposal at an agreed location (e.g.\u00a0the factory) but is not required to load the goods onto a vehicle or pay custom fees.\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">FCA \u2013 Free Carrier<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/b><\/span><\/span><\/p>\n<p><span data-contrast=\"auto\">When using FCA terms, the seller has to deliver the goods to the carrier at a named place. It is recommended to specify this place as clearly as possible as this is the place where the risk transfers from the seller to the buyer.\u00a0<\/span>Please note, that some clauses have been added, as of January 2020. Therefore we recommend you investigate further the Incoterm.<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">CPT \u2013 Carriage paid To<\/span><\/b><\/span><\/span><\/p>\n<p><span data-contrast=\"auto\">CPT means the seller has to deliver the goods at a named place, but also had to contract for and pay the costs of carriage to bring the goods to the named place of destination.\u00a0<\/span><\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">CIP \u2013 Carriage, Insurance Paid<\/span><\/b><\/span><\/span><\/p>\n<p class=\"paragraph\"><span data-contrast=\"auto\">Similar to CPT<\/span>, the seller is responsible for ensuring the property at a named place.\u00a0The seller must\u00a0contract an\u00a0\u201cAll Risk\u201d\u00a0insurance\u00a0to\u00a0protect the buyer from the risk of loss or damage to the named place of destination. However, the parties may agree to a lower level of coverage<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">DAP \u2013 Delivery at Place<\/span><\/b><\/span><\/span><\/p>\n<div>\n<p><span data-contrast=\"auto\">The seller is responsible for arranging carriage and for delivering the goods, ready for unloading from the arriving means of transport, at the named place. Risk transfers from seller to buyer when the goods are available for unloading<\/span>, meaning\u00a0unloading is at the buyer\u2019s risk.\u00a0The buyer is responsible for import clearance and any applicable local taxes or import duties.\u00a0Both parties are not obliged to make a contract of insurance, but it is recommended.<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">DDP \u2013 Delivery Duty Paid<\/span><\/b><\/span><\/span><\/p>\n<div>\n<p><span data-contrast=\"auto\">All the risk and costs are assumed by the s<\/span>eller.\u00a0The seller is responsible until the final destination. The buyer is responsible for unloading the goods at the final destination and has to assume the risk and the costs at this moment.<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<div>\n<h3><span data-contrast=\"auto\"><strong>Applicable <u>only to marine transport<\/u><\/strong><\/span><\/h3>\n<div>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">FAS \u2013 Free Alongside Ship<\/span><\/b><\/span><\/span><\/p>\n<p class=\"paragraph\"><span data-contrast=\"auto\">FAS means that responsibility is transferred when the property is placed alongside the\u00a0<\/span>boat\u00a0(for example,\u00a0on the\u00a0quay) the place defined by the buyer.\u00a0Therefore,\u00a0the seller does not assume the risk associated with the loading on the boat.<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">FOB \u2013 Free on Board<\/span><\/b><\/span><\/span><\/p>\n<p><span data-contrast=\"auto\">T<\/span>his Incoterm implies that the risk is transferred once the\u00a0goods\u00a0is loaded on the boat. Therefore,\u00a0the buyer is responsible for all costs from this moment.<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">CFR \u2013 Costs and Freight<\/span><\/b><\/span><\/span><\/p>\n<p class=\"paragraph\"><span data-contrast=\"auto\">Costs and Freight means that the seller is responsible for loading<\/span>\u00a0the goods\u00a0on the boat but must also contract and pay the transport to the destination port.<\/p>\n<p class=\"paragraph\"><span xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"normaltextrun\"><b><span lang=\"EN-US\">CIF \u2013 Costs, Insurance, Freight<\/span><\/b><\/span><\/span><\/p>\n<p class=\"paragraph\"><span data-contrast=\"auto\">The CIF implies that the seller delivers to the carrier and pays the transport and insurance for the buyer\u00a0<\/span>at a named place,\u00a0for any mode of transport. It is important\u00a0for\u00a0the buyer\u00a0to be\u00a0aware that the required insurance coverage is minimal. However, the parties may agree on a higher level of coverage.<\/p>\n<p>&nbsp;<\/p>\n<p>Except for CIP and CIF, <strong>insurance is not mandatory<\/strong>, neither for the seller nor the buyer.\u00a0 It\u00a0is also good to know that the Incoterms,\u00a0published by the International Chamber of Commerce (ICC), are <strong>updated every 10 years<\/strong> to monitor trends in international trade. The last edition is from January 2020.<span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\"><span class=\"eop\"><span lang=\"EN-US\"><br \/>\n<\/span><\/span><\/span><\/p>\n<p class=\"paragraph\"><span class=\"normaltextrun\"><span lang=\"EN-US\">When exploring international exports, we highly<\/span><\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">\u00a0recommend c<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">ollaborating with an export specialist. <\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">Such as, GoExport, which\u00a0<\/span><span xml:lang=\"EN-US\" data-contrast=\"auto\">offers services and knowledge in the field of international exporting businesses.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>Source\u202f:<br \/>\n<em><a href=\"https:\/\/iccwbo.org\/resources-for-business\/incoterms-rules\/incoterms-2020\/\">https:\/\/iccwbo.org\/resources-for-business\/incoterms-rules\/incoterms-2020\/<\/a><\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Understanding Incoterms &nbsp; EXW, FOB, CIP, FCA\u2026 You\u2019ve probably heard some of these terms in the past, but do you really know what they mean? The word Incoterm, which stands for\u00a0international\u00a0commerce\u00a0terms\u00a0defines the different types\u00a0of\u00a0agreements between a buyer and seller when exchanging goods from one country to the other. These\u00a0include:\u00a0who handles transportation, who pays for what and most importantly, when the [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":3279,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[95],"tags":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/www.goexport.ca\/wp-content\/uploads\/2020\/12\/jeffrey-blum-FQ06bmigBqg-unsplash-2-1.jpg","_links":{"self":[{"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/posts\/3234"}],"collection":[{"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/comments?post=3234"}],"version-history":[{"count":21,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/posts\/3234\/revisions"}],"predecessor-version":[{"id":6379,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/posts\/3234\/revisions\/6379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/media\/3279"}],"wp:attachment":[{"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/media?parent=3234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/categories?post=3234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.goexport.ca\/en\/wp-json\/wp\/v2\/tags?post=3234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}