Glossary

INCOTERMS are a set of uniform rules codifying the interpretation of trade terms defining the rights and obligations of both buyer and seller in an international transactions, thereby enabling an otherwise complex basis for a sale contract to be accomplished in three letters.

INCOTERMS are designed to arrange for the transfer of responsibility from seller to buyer at a convenient place where goods can be inspected. Hence FOB, CFR (C&F) and CIF arrange for this to occur upon loading on board the vessel. With containers, inspection at shipside is not possible, so that FOB, CFR etc. are inappropriate. The International Chamber of Commerce (ICC) have, accordingly drafted three Combined Transport equivalents, which they advise to use when availing of Combined Transport services in order to avoid disputes. They are FCA, CPT and CIP which transfer responsibility from seller to buyer at the inland point at which the carrier takes charge of the goods.

INCOTERMS can be divided into recommended usages by mode of carriage. The division recommended by the ICC is: – All modes (i.e.combined transport)-EXM, FCA, CPT, CIP, DAF, DDU, DDP. Conventional port-to-port/sea carriage only – FAS, FOB, CFR, CIF, DES, DEQ.

The terms set out hereunder are the INCOTERMS 1990: -

Glossary of Terms
INCOTERMS 1990.
Incoterms are a set of uniform rules codifying the interpretation of trade terms defining the rights and obligations of both buyer and seller in an international transactions, thereby enabling an othe
EXW
Ex works (named place)
FCA
Free Carrier (named place)
FAS
Free Alongside Ship (named port of Shipment)
FOB
Free on Board (named port of Shipment)
CFR
Cost and Freight (named port of destination)
CIF
Cost, Insurance & Freight (named port of destination)
CPT
Carriage paid to (named point of destination)
CIP
Carriage & Insurance paid to (named point of destination)
DAF
Delivered At Frontier (named point)
DES
Delivered Ex Ship (named port of destination)
DEQ
Delivered Ex Quay (duty paid) (named port of destination)
DDU
Delivered Duty Unpaid (named point)
DDP
Delivered Duty paid (named point)
Abbreviations
Athens
Convention International Convention governing carrier’s liability for passengers and their luggage.
ATA Carnet
Admission Temporaire, (Temporary Admission)-An ATA Carnet makes the customs clearance of certain temporary importation 7 exportation easier.
ANF
Arrival Notification Form-Advice to the consignee of goods coming forward.
Ad Valorem
(“at value”)-an ad valorem freight rate is one where the freight is based on the value of the goods. An ad valorem bill of lading is one where the value of the goods is shown on the face of the docume
BAF
Bunker Adjustment Factor
B/L
Bill of lading – acts as a receipt for the cargo and contains the terms of the contract of carriage and is a document of title to the goods.
Blue Book
Sets out regulations for the carriage of dangerous goods in ships, as required by the Department of Trade for dangerous goods aboard ships in British ports. It largely refers to the IMDG Code (see bel
Bonded warehouse
A place of security approved by the custom authorities for the deposit, keeping and securing of goods liable to excise duty, without payment of this duty.
Box
A colloquial name for a container.
Break Bulk Cargo
Goods shipped loose in the vessel’s hold and not in containers.