Incoterms 2010

Incoterms 2010

To put it simply, Incoterms (International Chamber of Commerce; ICC) are a series of pre-defined commercial terms related to sales, shipping, and purchasing practices, these set of rules have been widely used for international transactions, logistics, and procurement processes, intended to minimize any uncertainties, loss, costs, and damages associated with transportation and delivery of goods, as well as possible misinterpretation of the rules.

The Incoterms 2010

A uniform language, as you might want to call it, the Incoterms have been periodically updated, and our company we’ll be using the latest version – the Incoterms 2010 with full term is used and incorporated into contracts and documents applicable (e.g. “FOB Beijing Incoterms 2000” should be used).

The latest version defines 11 rules as opposed to 13 from Incoterms 2000 where four rules (“Delivered at Frontier”, DAF; “Delivered Ex Ship”, DES; “Delivered Ex Quay”, DEQ; “Delivered Duty Unpaid”, DDU) are replaced with two new ones (“Delivered at Terminal”, DAT; “Delivered at Place”, DAP).

11 Rules of Incoterms 2010

These 11 rules are divided based on delivery method, namely through the land (containing seven rules) or sea (containing four), with these four rules is only applicable to sales involving  transportation by water and not to be used in containerized freight, other combined transport methods.

Rules for any mode of transport is comprised of:

  1. EXW – Ex Works (named place of delivery). Common terms if you are importing from EU countries.
  2. FCA – Free Carrier (named place of delivery)
  3. CPT – Carriage Paid To (named place of destination)
  4. CIP – Carriage and Insurance Paid to (named place of destination)
  5. DAT – Delivered At Terminal (named terminal at port or place of destination)
  6. DAP – Delivered At Place (named place of destination)
  7. DDP – Delivered Duty Paid (named place of destination)

Rules for transportation and delivery involving sea and inland waterway

  1. FAS – Free Alongside Ship (named port of shipment)
  2. FOB – Free on Board (named port of shipment). Generally, most often used if you are importing from Asian countries.
  3. CFR – Cost and Freight (named port of destination)
  4. CIF – Cost, Insurance & Freight (named port of destination)
Simplified diagram of Incoterms (click to enlarge)

Useful Links for Incoterms

For further reading regarding Incoterms, please click the following links.


Based on the Incoterms List above, FOB and CIF are the top two most common terms used when it comes to make a business deal between two countries.

And at Venturette Solutions, those terms are favored by us, as stated by our policy although others are definitely welcome. Kindly contact us via email ( and see if your company will benefit from our service.

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