Incoterms (International Commercial Terms) are a set of standardized trade terms published by the International Chamber of Commerce (ICC). These terms define the responsibilities of buyers and sellers in international trade transactions, particularly in relation to the delivery of goods.
Incoterms clarify who is responsible for the costs and risk associated with various stages of the shipping process, such as transportation, insurance, import/export duties and customs clearance.
Key Aspects of Incoterms
Division of Costs: Incoterms specify who pays for each part of the shipping process, including transportation, insurance, and any duties or taxes.
Transfer of Risk: These terms define the point at which the risk of loss or damage to the goods shifts from the seller to the buyer.
Delivery Points: Incoterms outline where and when the seller must deliver the goods, and where the buyer takes possession.
Types of Incoterms:
There are several types of incoterms, including:
Multimodal Terms (suitable for any mode of transport):
EXW (Ex Works): The buyer is responsible for all costs and risks from the seller's premises onward.
FCA (Free Carrier): The seller delivers the goods to a carrier specified by the buyer at an agreed-upon location.
CPT (Carriage Paid To): The seller pays for transportation to a specified destination, but the risk transfers to the buyer once the goods are handed to the carrier.
CIP (Carriage and Insurance Paid To): Similar to CPT, but the seller also pays for insurance.
DAP (Delivered at Place): The seller is responsible for all costs and risks until the goods are delivered to a specific location, not unloaded.
DPU (Delivered at Place Unloaded): The seller is responsible for all costs and risks, including unloading at the destination.
DDP (Delivered Duty Paid): The seller is responsible for all costs, risks, and import duties, delivering the goods to the buyer's location.
Sea and Inland Waterway Terms:
FAS (Free Alongside Ship): The seller delivers the goods alongside the buyer’s vessel at the port of shipment.
FOB (Free on Board): The seller delivers the goods on board the vessel, and the risk passes to the buyer once the goods are on the ship.
CFR (Cost and Freight): The seller pays for the transportation to the port of destination, but the risk transfers once the goods are on board the vessel.
CIF (Cost, Insurance, and Freight): Similar to CFR, but the seller also covers insurance.
Which Incoterms Does Geomiq Use?
At Geomiq, our standard Incoterm is DAP (Delivered At Place).
DAP (Delivered at Place) means that the seller is responsible for all costs and risks associated with delivering the goods to a specified location, excluding unloading. Under this term, it is the responsibility of our Manufacturing Partners to ensure the timely shipment and delivery of goods to our facility, including handling any customs or logistical challenges. Geomiq covers the duties and taxes incurred when the goods enter either the UK or Portugal.
For certain orders, specific Incoterms may be agreed upon, but these will be clearly outlined at the quoting stage before you receive the purchase order.
If you are unsure about the Incoterms applicable to your order, please reach out via platform chat, and a member of our team will be happy to assist you.