Incoterm Shipping Terms
What are INCOTERMS
INCOTERMS are the language you’ll need when you’re trading abroad, defining the trade contract responsibilities and liabilities between a buyer and a seller. They cover who is responsible for paying freight costs, insuring goods in transit and covering any import/export duties, for example. They are invaluable as, once importer and exporter have agreed on an INCOTERM, they can trade without discussing responsibilities for the costs and risks covered by the term
Deliveries FCA - Free Carrier
The seller must 'deliver the goods to the carrier ... nominated by the buyer ... at the named place'. This term is suited for international sales with minimum obligations for the seller. Its advantage over EXW is that the seller is responsible for any export licensing and Customs export clearance, which eases the problem of proof of export, and the seller must load the goods (which is usually the case).
There is a new focus on 'FCA ... seller's premises' as the appropriate term for international sales when the seller wants to limit their obligations to the loading of the goods and export clearance.
Deliveries DAP
DAP - Delivered At Place
(…named place of destination). This is appropriate to both domestic and international sales.
The seller delivers when 'the goods are placed at the disposal of the buyer ready for unloading by the buyer ... at the named place'. All import Customs formalities and costs are the responsibility of the buyer.