Incoterms & shipping glossary

Commonly Used Shipping and Payment Terms

EXW (Ex Works)
Seller made goods available at his premises.

FCA (Free Carrier)
Seller handed over goods, cleared for export, into the charge of the carrier named by the buyer at the named place.

FAS (Free Alongside Ship)
Seller sent goods alongside the vessel or in lighters at the named port of shipment.

FOB (Free On Board)
Seller cleared goods for export at the named port of shipment.

CFR (Cost and Freight)
Seller paid costs necessary to bring the goods to the named port of destination.

CIF (Cost, Insurance and Freight)
Same as CFR but seller also has to include marine insurance loss or damage to goods during the shipment.

CPT (Carriage Paid To)
Seller paid freight to the named destination.

CIP (Carriage and Insurance Paid To)
Same as CPT, but also the seller has to include insurance loss of or damage to the goods during the carriage.

DAF (Delivered At Frontier)
Seller cleared goods for export, at the named destination but before the customs.

DDU (Delivered Duty Unpaid)
Seller delivered goods at the named destination.

DDP (Delivered Duty paid)
Seller delivered goods at the named destination and pay charges of delivering the goods to be cleared at custom.

DES (Delivered Ex Ship)
Seller delivered goods on board the ship, uncleared for import at the named destination. The seller pay to in bring goods to the named destination.

DEQ (Delivered Ex Quay, [Duty Paid])
Seller delivered goods at the named destination, cleared for importation.

Cash in Advance
Upfront cash to seller before shipment.

Letter of Credit (L/C)
A letter issued by a bank authorizing the bearer to draw a stated amount of money from the issuing bank, its branches, or other associated banks or agencies.

Open Account
An unpaid credit order.

Payments deferred until goods sold.

Telegraphic Transfer (T/T)
Electronic transfers of funds through banks.