INCO Terms

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INCO Terms
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2. Determine (Incoterms) Terms of Sale

• Exporter must know the terms before preparing a
  quotation or a pro forma invoice.
• Incoterms are standardized names created by the
  International Chamber of Commerce (ICC) for
  describing terms of sale.

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Diagram of INCO terms

• http//www.export911.com/e911/export/incoterm

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Most Common Incoterms
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Most Common Incoterms
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FOB Example
FOB, New Orleans for 3 ice makers. You as the
exporter are responsible for all costs in
delivering the goods to New Orleans and loading
the icemakers on board a vessel named by the
German firm. You are responsible for arranging
any export clearances (licenses, taxed, fees).
The German firm is responsible for booking space
for cargo and pays for the ocean freight.
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CIF Example
CIF (Named foreign port of destination) YCI
quotes its German customer CIF Bremerhaven for 3
ice makers. YCI arranges for and pays all
transportation costs to the Port of Bremerhaven.
YCI arranges and pays for the marine insurance
policy. YCI, however, is only responsible for
risk of loss until loading of the icemakers on
board the vessel in New Orleans.
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FAS Example
YCI, the U.S. exporter, quotes the German firm
FAS, New Orleans for 3 ice makers. YCI is
responsible for all costs in getting the goods to
the Port of New Orleans alongside the nominated
vessel prior to sailing time. The German buyer
is responsible for booking space, paying ocean
freight and arranging for all export clearances.
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Source for INCOTERMS

• For a complete list of INCOTERMS, including
  responsibilities of the parties, see Incoterms
  2000.
• http//www.dsl.co.nz/index.asp?pageincoterm.htm