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Incoterms 2000 Trade Definitions

Incoterms are standard trade definitions most commonly used in international sales contracts. Devised and published by the International Chamber of Commerce (ICC), they lie at the heart of world trade.

In order to ensure the Incoterms 2000 terms are being applied, buyers and sellers should specify Incoterms 2000 on all contracts, thus clearly identifying the source of reference for the definition. Traders using these rules should also clearly specify any and all agreed to variations of the terms.

Correct use of Incoterms goes a long way to providing the legal certainty upon which mutual confidence between business partners is based. For a greater level of assurance or a more complete understanding of any of the Incoterms please contact us.

Below are some very brief definitions of each of the 13 Incoterms. For a complete summary of the term, click on the term name and you will be taken to a page with a more complete explanation.

You may also wish to refer to our summary chart.

Please note that every effort has been made to ensure the accuracy of the definitions and chart; however, Allegro accepts no responsibility for errors or omissions in the chart or any of the summary descriptions.

The defined terms are divided into four categories:

1. Origin Terms: "E"

Under the "E" term (there is only one) the seller only makes the goods available to the buyer at the seller's own premises.

• EXW - Ex-Works, named place where the shipment is available to the buyer, not loaded.

2. International Carriage Not Paid by Seller: "F"

Under the "F" terms, the seller is called upon to deliver the goods to a carrier appointed by the buyer.

• FCA - Free Carrier, unloaded at the seller's dock OR a named place.
• This term is used where shipment is available to the international carrier or agent, not loaded.
• FAS - Free Alongside Ship, named ocean port of shipment.
  This term is used for ocean shipments that are NOT containerized.
• FOB - Free On Board vessel, named ocean port of shipment.
  This term is used for ocean shipments only where it is important that the goods pass the ship's rail.
   

3. International Carriage Paid by Seller: "C"

Under the "C"-terms, the seller has to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment or dispatch.

• CFR - Cost and Freight, named ocean port of destination.
  This term is used for ocean shipments that are NOT containerized.
• CIF - Cost, Insurance and Freight, named ocean port of destination.
  This term is used for ocean shipments that are NOT containerized.
• CPT - Carriage Paid To, named place or port of destination.
  This term is used for air or ocean containerized and roll-on roll-off shipments.
• CIP - Carriage and Insurance Paid To, named place or port of destination.
  This term is used for air or ocean containerized and roll-on roll-off shipments.
   

4. Arrival at Stated Destination: "D"

Under the "D"-terms, the seller has to bear all costs and risks needed to bring the goods to the place of destination.

• DAF - Delivered At Frontier, named place of destination, by land, not unloaded.
  This term is used for any mode of transportation but must be delivered by land.
• DES - Delivered Ex-Ship, named port of destination, not unloaded.
  This term is used for ocean shipments only.
• DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.
  This term is used for ocean shipments only.
• DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
  This term is used for any mode of transportation.
• DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.
  This term is used for any mode of transportation.