13 International Shipping Terms and Conditions in Export Import Business

Shipping Terms Abbreviations or INCO Terms:
INCO terms mean International commercial terms which are evolved to fulfill certain rights and obligations imposed by a trade contract on the buyer and seller. An export contract involves some uncertainties after the goods are shipped and before they are received by the buyer.

Shipment terms and conditions in import-export business
Shipment terms and conditions in import-export business
The responsibility or obligation towards the shipped goods lies to who has become an important issue. INCO terms will dictate the responsibility of the seller till where and the responsibility of the buyer from where.

The INCO terms were evolved by the International Chamber of Commerce to provide a set of international rules for the interpretation of the chief terms used in the foreign trade contracts. 

INCO terms were published first in 1936 and subsequently amended and added to in 1953, 1967, 1976, 1980 and 1990. The latest 2000 version defines 13 contract terms, providing an up to date set of rules broadly in the line with the current international trade practices.

Though the adoption of INCO terms is optional, the merchants wishing t use these rules should specify that their contacts will be governed by “INCO terms-2000”. The selection of an INCO term is accordance with the convenience of the parties concerned and as agreed by them.

While quoting the price, the seller takes into account not only the cost of apparel production or apparel costing but also additional costs and risks involved as per the trade term agreed.

Important Shipment Terms and Conditions in Import-Export Business:
The thirteen INCO terms are as listed in the below in ascending order of responsibility or obligation to the seller.
SL No.
Letter Term
Contract Terms
Abbreviations
Mode of Transport
01
E- Term
Ex Works
EXW
All modes
02
F- Terms
Free carrier
FCA
All modes
03
Free Alongside Ship
FAS
Water
04
Free On Board
FOB
Water
05
C- Terms
Cost and Freight
CFR
Water
06
Cost, Insurance and Freight
CIF
Water
07
Carriage Paid To
CPT
All modes
08
Carriage Insurance Paid To
CIF
All modes
09
D- Terms
Delivered at Frontier
DAF
All modes
10
Delivered Ex Ship
DES
Water
11
Delivered Ex Quay
DEQ
Water
12
Delivered Duty Unpaid
DDU
All modes
13
Delivered Duty Paid
DDP
All modes