19 Feb What is “Incoterms”?
Today, we will get acquainted with important logistics terms related to online selling. The category of basic terms you should know includes.
Incoterms Short for International Commercial Terms, it refers to the conditions for the delivery of goods between the buyer and the seller. This helps both parties understand the boundaries of responsibilities and the various costs and risks involved.
Incoterms are divided into 11 terms that you should be aware of.
Incoterms e-commerce
Sure, here is the translation of the provided information :
- EXW – Exworks
In this delivery term, the seller is responsible for the goods only at the point of sale, such as the storefront, factory gate, or any other location where the seller makes the goods available. Some refer to this term as “ex-factory price.”
- FCA – Free Carrier
In this type of delivery, the seller is responsible for transportation costs up to a specified point, which could be an airport or customs. Once the goods are on the carrier, such as an airplane or a vessel, the costs related to shipping and other charges become the buyer’s responsibility. Therefore, the price includes shipping costs by air or sea.
- FAS – Free Along Side
As the name suggests, “Free Along Side” means no costs are incurred from the origin to the port of shipment or the airport. The seller is responsible for the goods until they reach the dock of the shipping port at the origin. After that, the buyer takes responsibility for costs and various risks.
The seller bears all expenses until the goods are loaded onto the vessel or aircraft. After that, when the goods are in transit and reach the destination, the buyer is responsible.
- CFR – Cost and Freight
The seller is responsible for transportation costs and destination customs duties and assumes risk until the goods reach the vessel or aircraft. If any risks occur during the transit, once the vessel or aircraft departs, the seller is no longer liable.
- CIF – Cost, Insurance & Freight
In this term, the seller covers various costs in shipping, such as transportation and insurance, until the goods are loaded onto the vessel. If any damage occurs while the goods are on the vessel, the seller is responsible. However, the seller’s responsibilities end when the goods reach the destination port.
- CIP – Carriage and Insurance Paid To
The seller is responsible until the goods reach the buyer’s hands, covering insurance, customs duties, and transportation costs.
- CPT – Carriage Paid To
The seller is responsible for expenses until the goods reach the designated transportation company or the company that will handle the next stage of transportation. After that, the buyer takes responsibility for costs and risks.
- DDU – Delivery Duty Unpaid
This term provides a complete definition of delivering goods when they are unloaded from the truck or placed at the specified destination, such as the buyer’s warehouse, home, or workplace. After this point, the buyer is responsible for costs and risks.
- DAP – Delivered At Place
The seller takes care of everything until the goods are unloaded at the specified destination. The buyer only needs to handle import taxes at the destination country and insurance costs in case of unforeseen events.
- DDP – Delivered Duty Paid
In this term, the buyer benefits as the seller takes responsibility for all expenses, including transportation costs, loading onto the carrier, unloading from the carrier, insurance costs, and customs duties. The buyer is not responsible for any of these.
When making a purchase, it’s essential to check the delivery policies of each seller to understand their policies and determine whether you can accept them. It’s common in E-commerce for businesses to use DAP and DDP terms, especially when dealing with marketplaces like Amazon.
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