International Trade Blog

Companies that ship domestically within the United States often use the trade term FOB—Free On Board. But FOB has a completely different meaning under the international trade terms, Incoterms 2020. Exporters who want to use the international equivalent to FOB often use the Incoterm FCA—Free Carrier At.

Like all 11 of the 2020 Incoterms rules, FCA identifies whether it is the seller or the buyer who pays the domestic, international and on-carriage freight charges. So, let’s compare the domestic use of FOB with the international use of FCA.

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Before you calculate your final selling price and negotiate a sales contract, you and your buyer must agree upon who is responsible for the expense of transporting and insuring the merchandise from the time it leaves your plant or warehouse to the time it arrives at your customer's premises.

To assist in this process, the International Chamber of Commerce (ICC) has created a generally accepted, readily understandable nomenclature called Incoterms 2020 that defines the responsibilities of both the buyer and seller in the various transportation options.

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If you ship goods domestically, you may wonder why you need to understand Incoterms. FOB is FOB, isn't it?

Well, actually, no—it's not!

While the vast majority of companies in the United States use the shipping terms identified under the U.S. Uniform Commercial Code (UCC) when shipping domestically, these shipping terms aren't appropriate to use when exporting.

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In my experience, many U.S. importers, exporters and bankers don’t understand Incoterms rules.

They often don’t understand the definitions or the risks and responsibilities of even their favorite sales terms that they’ve always used. They also don’t understand how Incoterms relate to payment terms.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfers from the seller to the buyer.

In this article, we’re discussing the Incoterm DDP, also known as Delivered Duty Paid.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfers from the seller to the buyer.

In this article, we’re discussing the Incoterm DPU, also known as Delivered At Place Unloaded.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfers from the seller to the buyer.

In this article, we’re discussing the Incoterm DAP, also known as Delivered At Place.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfers from the seller to the buyer.

In this article, we’re discussing the Incoterm CIP, also known as Carriage and Insurance Paid To.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfer from the seller to the buyer.

In this article, we’re discussing the Incoterm CPT, also known as Carriage Paid To.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfer from the seller to the buyer.

In this article, we’re discussing the Incoterm CIF, also known as Cost, Insurance and Freight.

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