How familiar are you with Incoterms??

Definition of 'Incoterms'

Trade terms, published by the International Chamber of Commerce (ICC), that are commonly used in international contracts.

Investopedia explains 'Incoterms'

Incoterms are used to make international trade easier by helping traders in different countries understand one another. 

Trade terms used ...internationally (such as Incoterms) are often identical in form to domestic terms (such as the American Uniform Commercial Code), but have different meanings. Therefore, it is important to indicate the particular law that governs their terms. For example, to use the Incoterm definition, a contract might refer to: "FOB (Incoterms 2000)."

Read more: http://www.investopedia.com/terms/i/incoterms.asp#ixzz1sVu4mzTu



Here  are some Incoterms in the Logistic corpus:

Ex works (EXW) is an Incoterm. It means that the seller X has the goods ready for collection at his premises (Works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. This term requires that the buyer must be able to carry out export formalities in the country of supply, these days almost impossible. Therefore in the vast majority of cases where terms are quoted EXW they actually intend the seller to carry out export formalities which means that the correct term is FCA (Seller's premises). 

Free Carrier (FCA) is an Incoterm. The seller delivers the goods into the custody of the first carrier, and this is where risk passes from seller to buyer. The buyer pays for the transportation. It can be used for all modes of transportation including multimodal transport, such as in shipping containers where the ship's rail plays no relevant part in determining a shipping point.FCA is also the term to use in place of FOB for airfreight transactions. 

Free Along Side (FAS) is an Incoterm. It means that the seller pays for transportation of the goods to the port of shipment. The buyer pays loading costs, freight, insurance, unloading costs and transportation from the port of destination to his factory. The passing of risk occurs when the goods have been delivered to the quay at the port of shipment. 

Free On Board (FOB) is an Incoterm — also commonly but incorrectly referred to as "Freight on Board". It means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays freight, insurance, unloading costs and transportation from the port of destination to the factory. The passing of risks occurs when the goods pass the ship's rail at the port of shipment. Internationally the term specifies the port of loading, e.g. "FOB New York" or "FOB Vancouver". 

Cost and Freight (CFR) is an Incoterm. It means that the seller pays for transportation to the Port of Loading (POL), loading and freight. The buyer pays for the insurance and transportation of the goods from the Port of Discharge (POD) to his factory. The passing of risk occurs when the goods pass the ship's rail at the port of shipment which means that this term cannot be used for airfreight or land transport and also is inappropriate for most containerised sea shipments - the term CPT is the appropriate one for these. 

Cost, Insurance and Freight (CIF) is a common term in a sales contract that may be encountered in international trading when ocean transport is used.When a price is quoted CIF, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. CIF is an international commerce term (Incoterm). CIF is identical in most particulars with Cost and Freight (CFR), and the same comments apply, including its applicability only to conventional maritime transport. In addition to the CFR responsibilities, the seller under CIF must obtain in transferable form a marine insurance policy to cover the risks of transit with insurers of repute. The policy must cover the CIF price plus 10 per cent and where possible be in the currency of the contract. Note that only very basic cover is required equivalent to the Institute "C" clauses, and buyers should normally insist on an "all-risk" type of policy such as that under the Institute "A" clauses. The seller's responsibility for the goods ends when the goods have been delivered on board the shipping vessel. In the guidelines for CIF published in Incoterms 2000 the term "carrier" does not appear and it clearly states "the seller must deliver the goods on board the vessel at the port of shipment" which makes CIF the incorrect term to use where the seller wishes their responsibility to end when they deliver the goods into the hands of a carrier prior to the goods passing the ship's rail at the port of loading. In the great majority of transactions the more correct term is CIP. This term is only appropriate for conventional maritime transport, not ro/ro or international container movements. 

Carriage Paid To (CPT) is an Incoterm. It can be used for all modes of transport including multimodal transport. The seller pays for the freight to the named point of destination. The buyer pays for the insurance. The passing of risk occurs when the goods have been delivered into the custody of the first carrier. 

Carriage and Insurance Paid to (CIP) is an Incoterm. The passing of risk occurs when the goods have been delivered into the custody of the first carrier. This means that the buyer bears all risk and any additional costs occurring after the goods have been so delivered.It is the same as CPT except that the seller also pays for the insurance. Seller is required to obtain insurance only on minimum cover, additional coverage is responsibility of buyer or must be agreed between seller and buyer. Under CIP seller is also required to clear the goods for export. 

Delivered At Frontier (DAF) is an Incoterm. It can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier. 

Delivered Ex Ship (DES) is an Incoterm. Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement. 

Delivered Ex Quay (DEQ) is an Incoterm. It means the same as DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination. 

Delivered Duty Unpaid (DDU) is an Incoterm. It means that the seller pays for all transportation costs and bears all risk until the goods have been delivered, but does not pay for the duty. 

Delivered Duty Paid (DDP) is an Incoterm. It means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty. 


source:
http://www.spenak.com/lexicon.Incoterms.1.html