13 International Shipping Terms and Conditions in Export Import Business

13 International Shipping Terms and Conditions in Export Import Business

Shipping Terms Abbreviations or INCO Terms:

INCO terms mean International commercial terms that are evolved to fulfill certain rights and obligations imposed by a trade contract on the buyer and seller. An export contract involves some uncertainties after the goods are shipped and before they are received by the buyer. We are sharing here 13 International Shipping Terms and Conditions in Export Import Business.

The responsibility or obligation towards the shipped goods lies to who has become an important issue. INCO terms will dictate the responsibility of the seller till where and the responsibility of the buyer from where.

The INCO terms were evolved by the International Chamber of Commerce to provide a set of international rules for the interpretation of the chief terms used in the foreign trade contracts. 

INCO terms were published first in 1936 and subsequently amended and added to in 1953, 1967, 1976, 1980 and 1990. The latest 2000 version defines 13 contract terms, providing an up to date set of rules broadly in the line with the current international trade practices.

Though the adoption of INCO terms is optional, the merchants wishing t use these rules should specify that their contacts will be governed by “INCO terms-2000”. The selection of an INCO term is accordance with the convenience of the parties concerned and as agreed by them.

While quoting the price, the seller takes into account not only the cost of apparel production or apparel costing but also additional costs and risks involved as per the trade term agreed.

Shipment Terms and Conditions in Import-Export Business:

The thirteen INCO terms are as listed in the below in ascending order of responsibility or obligation to the seller.

SL No.	Letter Term	Contract Terms	Abbreviations	Mode of Transport
01	E- Term	Ex Works	EXW	All modes
02	F- Terms	Free carrier	FCA	All modes
03		Free Alongside Ship	FAS	Water
04		Free On Board	FOB	Water
05	C- Terms	Cost and  freight	CFR	Water
06		Cost, Insurance and Freight	CIF	Water
07		Carriage Paid To	CPT	All modes
08		Carriage Insurance Paid To	CIF	All modes
09	D- Terms	Delivered at Frontier	DAF	All modes
10		Delivered Ex Ship	DES	Water
11		Delivered Ex Quay	DEQ	Water
12		Delivered Duty Unpaid	DDU	All modes
13		Delivered Duty Paid	DDP	All modes

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