Incoterms for Apparel Export

Incoterms 2000 First published by the ICC in 1936  ICC International Chamber of Commerce Official Rules for the Interpretation of Trade terms..  Purpose is to provide a set of interna

Aravin Prince Periyasamy M.Tech (Textiles)

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These are In ternationally Accepted Co mmercial

responsibilities (including costs) of the buyer and seller in the arrangement of transportation and other obligations

Incoterms 2000

 First published by the ICC in 1936

 ICC (International Chamber of Commerce) Official Rules for the Interpretation of Trade terms.

 Purpose is to provide a set of international rules for the interpretation of the most commonly used trade terms.

 10 categories describing where risks lie between seller and buyer

 International Commercial Terms (INCOTERMS)

Incoterms – Purpose and Scope

 Pricing terms, shipping terms, sales terms

 Apply to international trade

 Define the rights and obligation of the

parties to the contract of sale with respect to the delivery of goods sold

Four Groups of Incoterms

Less

Control

More Control

1) “E” group 2) “F” group 3) “C” group 4) “D” group

More

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 The “E”-term is the term in which the seller’s

obligation is at its minimum.

 Seller delivers when goods placed at disposal of buyer

Incoterms 2000

 The “F” –terms require the seller to deliver goods for carriage as instructed by the

buyer.

 FCA

 FAS

 FOB

Incoterms 2000

 The “C” –terms require the seller to contract for carriage at his expense – to a specified point.

 CFR

 CIF

 CPT

 CIP

Incoterms 2000

 The “D” –terms require the seller to take the goods all the way to destination at the border

or within the country of import.

 DAF

 DES

 DEQ

 DDU

 DDP

 Group E - Departure:

 EXW Ex Works (named place)

 Group F - Main Carriage Unpaid:

 FCA Free Carrier (named place)

 FAS Free Alongside Ship named loading port)

 FOB Free On Board (named loading port)

 Group C - Main Carriage Paid:

 CFR Cost and Freight (named destination port)

 CIF Cost, Insurance and Freight (named destination port)

 CPT Carriage Paid To (named destination)

 CIP Carriage and Insurance Paid to (named destination)

 Group D - Arrival:

 DAF Delivered At Frontier (named place)

 DES Delivered Ex Ship (named port)

 DEQ Delivered Ex Quay (named port)

 DDU Delivered Duty Unpaid (named destination place)

 DDP Delivered Duty Paid (named destination place)

In Summary

 Buyer’s Objective: maximize control of

supply chain, use FOB, FCA, or FAS

 Must name a place after the INCOTERM

 INCOTERMS are negotiable!

 INCOTERMS should appear on all

commercial documents

 Establish a close relationship with a

forwarder

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