It is easy to memorize the essentials of Incoterms from their first letter:
Posted: Sun Jan 12, 2025 5:18 am
What are the 11 Incoterms?
In 2023, there are 11 Incoterms that define the outlines of the sharing of risk and costs between the two parties of a sale. It is the International Chamber of Commerce that defined the 11 official Incoterms in 2020 and modified those that had been used since 2010.
Incoterms beginning with an E: Initial Incoterms which specify that the buyer takes care of the entire transport while the seller simply makes the goods available.
Incoterms starting ios database with C: The main transport is paid by the seller.
Incoterms beginning with D: These are so-called “arrival” Incoterms, specifying that the buyer does not take care of anything. It is the seller who manages the transport and pays for it.
Incoterms beginning with F: They specify that the main transport is not at the seller's expense. It will be the buyer's responsibility to cover the cost.
Since 1990, Incoterms have been revised every 10 years. In 2020, changes have been made to redefine the relationships between importers and exporters. Understanding Incoterms has been made easier to avoid the interpretation problems that were common in previous versions.
EXW (EX Works): at the factory
The EXW incoterm means that the seller is only obliged to make the goods available in his warehouse. The buyer takes care of loading and transport to the destination. In addition, there are insurance costs and the various formalities and associated risks.
FCA (Free Carrier): free carrier
The Incoterm FCA means that the goods are handed over to the carrier by the seller so that they can be transported to the buyer. The seller is responsible for transport to the final destination. It is also the seller who bears the costs, takes out insurance, manages the formalities and the associated risks.
Since 2020, the FCA has been enhanced with an option called "bill of lading on board". The bill of lading corresponds to the receipt of goods shipped by sea. By activating this option, the buyer, who is responsible for transport, instructs the carrier to provide the buyer with proof of loading on board. This makes it possible to meet certain requests from banks, particularly in the context of a documentary credit.
In 2023, there are 11 Incoterms that define the outlines of the sharing of risk and costs between the two parties of a sale. It is the International Chamber of Commerce that defined the 11 official Incoterms in 2020 and modified those that had been used since 2010.
Incoterms beginning with an E: Initial Incoterms which specify that the buyer takes care of the entire transport while the seller simply makes the goods available.
Incoterms starting ios database with C: The main transport is paid by the seller.
Incoterms beginning with D: These are so-called “arrival” Incoterms, specifying that the buyer does not take care of anything. It is the seller who manages the transport and pays for it.
Incoterms beginning with F: They specify that the main transport is not at the seller's expense. It will be the buyer's responsibility to cover the cost.
Since 1990, Incoterms have been revised every 10 years. In 2020, changes have been made to redefine the relationships between importers and exporters. Understanding Incoterms has been made easier to avoid the interpretation problems that were common in previous versions.
EXW (EX Works): at the factory
The EXW incoterm means that the seller is only obliged to make the goods available in his warehouse. The buyer takes care of loading and transport to the destination. In addition, there are insurance costs and the various formalities and associated risks.
FCA (Free Carrier): free carrier
The Incoterm FCA means that the goods are handed over to the carrier by the seller so that they can be transported to the buyer. The seller is responsible for transport to the final destination. It is also the seller who bears the costs, takes out insurance, manages the formalities and the associated risks.
Since 2020, the FCA has been enhanced with an option called "bill of lading on board". The bill of lading corresponds to the receipt of goods shipped by sea. By activating this option, the buyer, who is responsible for transport, instructs the carrier to provide the buyer with proof of loading on board. This makes it possible to meet certain requests from banks, particularly in the context of a documentary credit.