International Trade Blog

Incoterms 2020 rules are the latest revision of international trade terms published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to the 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 FAS, also known as Free Alongside Ship.

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

There are 11 trade terms available under the Incoterms 2020 rules that range from Ex Works (EXW), which conveys the least amount of responsibility and risk on the seller, to Delivered Duty Paid (DDP), which places the most responsibility and risk on the seller. The Incoterms 2020 Rules: Chart of Responsibilities and Transfer of Risk summarizes the seller and buyer responsibilities under each of the 11 terms.

In this article, we’re discussing the Incoterm FCA, also known as Free Carrier.

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Incoterms 2020 rules are the latest revision of international trade terms published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to the 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 EXW, also known as Ex Works.

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

Well, actually, no—they’re 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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The International Chamber of Commerce (ICC) has released the new Incoterms 2020 rules that identify the responsibilities of buyers and sellers for the delivery of goods in international trade. The terms also identify when the risk for those goods transfer from the seller to the buyer.

The new terms take effect on January 1, 2020.

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The International Chamber of Commerce (ICC) has developed several publications providing sellers and buyers with guidance on the use of Incoterms 2010. My favorite is Incoterms rules, Publication No. 715e.

According to the ICC, Delivered Duty Paid (DDP) means:

[T]he seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport, ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.

The ICC was succinct in its description of obligations for the seller in this paragraph. However, there’s more detail to consider for the seller and for the buyer when establishing a contract that references DDP.

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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 2010. Exporters who want to use the international equivalent to FOB often use the Incoterm FCA—Free Carrier At.

Like all 11 of the 2010 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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Incoterms are the official International Chamber of Commerce (ICC) rules for the explanation of trade terms. Incoterms 2010 is adhered to by all major trading nations of the world, and it is the authoritative text for determining how costs and risks are allocated to parties conducting international transactions. Incoterms facilitate the conduct of international business by defining the responsibilities of the involved participants.

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Incoterms are the official International Chamber of Commerce (ICC) rules for the explanation of trade terms. Incoterms 2010 is adhered to by all major trading nations of the world, and it is the authoritative text for determining how costs and risks are allocated to the parties conducting international transactions. Incoterms facilitate the conduct of international business by defining the responsibilities of the involved participants.

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When companies negotiate a sale of goods, they typically specify the terms of the sale including when the seller transfers ownership of the goods to the buyer, who then assumes the associated risk of loss. This can occur before the buyer takes actual possession of the goods.

Perhaps the most familiar of these terms is FOB; however, there are several others. Such terms are also known as trade terms or mercantile symbols.

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