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At United Global Trading Corp, we understand that engaging in international trade can be complex, especially for our valued buyers. One essential aspect of global trade is understanding Incoterms, or International Commercial Terms. These internationally recognized rules, established by the International Chamber of Commerce (ICC), define the responsibilities and obligations of buyers and sellers in international trade.
In this guide, we will provide an overview of Incoterms to help you navigate these crucial components of international trade.
The most recent version of Incoterms, released in 2020, consists of 11 terms, divided into two groups: rules for any mode of transport and rules specifically for sea and inland waterway transport. As a buyer, you should familiarize yourself with these terms to understand your responsibilities and our obligations when doing business with United Global Trading Corp.
EXW (Ex Works): We make the goods available at our premises, and you are responsible for all costs and risks associated with transporting the goods to their final destination.
FCA (Free Carrier): We deliver the goods to a specified carrier at a named location, at which point the risk transfers to you.
CPT (Carriage Paid To): We arrange and pay for transport to a named destination, but risk transfers to you once the goods are handed over to the carrier.
CIP (Carriage and Insurance Paid To): Similar to CPT, but we also arrange and pay for cargo insurance covering your risk during transportation.
DAP (Delivered At Place): We are responsible for delivering the goods to a specified destination, with you assuming risk and responsibility for unloading and import clearance.
DPU (Delivered at Place Unloaded): We deliver the goods, unloaded from the transport vehicle, at a specified destination, with you responsible for import clearance.
DDP (Delivered Duty Paid): We assume all responsibilities and costs, including import duties and taxes, to deliver the goods to your specified destination.
FAS (Free Alongside Ship): We deliver the goods alongside the ship at a specified port, with you responsible for loading the goods onto the ship and all subsequent costs and risks.
FOB (Free On Board): We are responsible for loading the goods onto the ship at a specified port, at which point the risk transfers to you.
CFR (Cost and Freight): We arrange and pay for transport to the destination port, but the risk transfers to you once the goods are loaded onto the ship.
CIF (Cost, Insurance, and Freight): Similar to CFR, but we also arrange and pay for cargo insurance covering your risk during transportation.
As a buyer working with United Global Trading Corp, understanding Incoterms is crucial to ensure smooth transactions, effective communication, and proper allocation of costs and risks. When you work with us, we will always specify the chosen Incoterm, along with the agreed-upon version (e.g., Incoterms 2020), and provide a clear and accurate description of the goods and the named place or port.
If you have any questions or require further assistance, please do not hesitate to contact us.
To further your understanding of Incoterms, we recommend the following resources: