Incoterms or Freight Glossary

Most industries require consistent standards and terminology to operate efficiently, and freight is no different. Known as "Incoterms" or "Freight Glossary", the 11 rules facilitate smooth transactions. Incoterms ensure all parties understand responsibilities, risks, costs and duties according to agreed-upon terms per local, national and international standards.

Various terms apply to either aviation or ocean freight. The terminology is as follows:

General Air and Sea Freight Terms

EXW – Ex Works

No seller responsibility.

FCA – Free Carrier

Seller is responsible for transport to the hub. The buyer must unload.

CPT – Carriage Paid To

Seller arranges transport to the destination port. The buyer then assumes the risk.

CIP – Carriage and Insurance Paid To

CPT + seller pays insurance up to the destination hub.

DAT – Delivered at Terminal

Seller is responsible for everything before terminal arrival.

DAP – Delivered at Place

DAT + buyer assumes unloading risk.

DDP – Delivered Duty Paid

Seller is responsible for everything until arrival at port customs, including owed duties.

Sea/Ocean Freight Terms

FAS – Free Alongside Ship

The buyer is responsible for following the unloading of a consignment.

FOB – Free on Board

The buyer is responsible for the consignment following loading.

CFR – Cost & Freight

Same as FOB with costs paid by the seller.

CIF – Cost Insurance & Freight

Same as CFR, but the seller is responsible for insurance until arrival at the destination port.

In addition to the correct rules, all freight is subject to a "schedule B" or "Harmonized Tariff" number unique to each shipment. The tariff number is a requirement to calculate the correct taxation rate of each shipment product.

 

Speedshift | Pallet Shipping call 0845 519 0270