1812: The FOB Incoterm was first used in the British Courts in 1812. This was later known as the forefather of the famous transport clauses - Incoterms.
1895: 83 years later, thanks to the expansion of world trade, a second Incoterm was born.
1936: The birth of Incoterms as we know them today. In 1936, the ICC published the first edition with six Incoterms and rules on how to interpret them. For the first time in history, there was a global effort to standardize international trade practices.
1953: The first Incoterms revision came after WWII. Rail transportation was on the rise and three new Incoterms were introduced for non-maritime transport:Free on Rail, Free on Truck, and Delivered Costs Paid. EXW Incoterm was also added.
1976: The FOB Airport Incoterm (Free on Board Airport) was introduced for air freight to avoid confusion with the FOB Incoterm.
1980: Due to the proliferation of freight traffic in containers, two new Incoterms were added: FRC and FCI, which are known today as FCA and CIP respectively.
1990: A complete revamp of Incoterms to adapt to inter-modal transportation. Changes were made to accommodate the increasing use of Electronic Data Interchange (EDI).
2000: In 2000, Incoterm formats were simplified for clarity and to better distribute responsibilities for customs clearance.
2010: Four Incoterms (DAF, DES, DEQ, DDU) were eliminated and two new ones (DAT and DAP) introduced, bringing the number of Incoterms to 11. Modifications were also made so that buyer and seller were obliged to cooperate in the exchange of information as a security measure.
2020: Definitive changes yet to be announced. But we can expect to see the introduction of a new Incoterm, Cost and Insurance (CNI), and the removal of EXW and FAS. Also expect a more simplified version to aid comprehension and application of each Incoterm.
Incoterms are governed by the International Chamber of Commerce (ICC) in Paris and are grouped into four different categories. In Groups E and F the seller's obligations are minimal and the buyer must do most of the work and assume maximum risk. As we move to Group C the supplier's obligations become more extensive, however the buyer still assumes risks. As we move to group D the supplier makes most arrangements and assumes maximum risk, whereas the buyer must pay for and arrange import customs clearance and un-loading from the forwarder's vehicle at the final destination.
The seller makes the goods available to be collected at their premises and the buyer is responsible for all other risks, transportation costs, taxes and duties from that point onwards. This term is commonly used when quoting a price. Example Goods are being picked up by the buyer from the seller's premises in Mundra. The term used in the contract is 'EXW Mundra'.
The seller gives the goods, cleared for export, to the buyer's carrier at a specified place. The buyer is then responsible for getting transported to the specified place of final delivery. This term is commonly used for containers travelling by more than one mode of transport.
The seller pays to transport the goods to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.
The seller pays for insurance as well as transport to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.CIP ('Carriage and Insurance Paid') is commonly used for goods being transported by container by more than one mode of transport. If transporting only by sea, CIF is often used (see below).
The seller pays for transport to a specified terminal at the agreed destination. The buyer is responsible for the cost of importing the goods. The buyer takes responsibility once the goods are unloaded at the terminal.
The seller pays for transport to the specified destination, but the buyer pays the cost of importing the goods. The seller takes responsibility for the goods until they're ready to be unloaded by the buyer.
The seller is responsible for delivering the goods to the named destination in the buyer's country, including all costs involved.
The seller puts the goods alongside the ship at the specified port they're going to be shipped from. The seller must get the goods ready for export, but the buyer is responsible for the cost and risk involved in loading them. This term is commonly used for heavy-lift or bulk cargo (e.g. generators, boats), but not for goods transported in containers by more than one mode of transport (FCA is usually used for this).
The seller must get the goods ready for export and load them onto the specified ship. The buyer and seller share the costs and risks when the goods are on board. This term is not used for goods transported in containers by more than one mode of transport.
The seller must pay the costs of bringing the goods to the specified port. The buyer is responsible for risks when the goods are loaded onto the ship.
The seller must pay the costs of bringing the goods to the specified port. They also pay for insurance. The buyer is responsible for risks when the goods are loaded onto the ship.
DEFINATION :Totally enclosed and Waterproof, having a rigid proof, rigid side walls and floor, having at least one of its end walls equipment with doors and intended to be suitable for transport of cargo of the greatest possible variety.
USES :This is by far the most common type of Container. It is suitable for the carriage of most types of "Dry" goods, including those packed in Boxes, Cartons, Cases, Sacks, Bales, Pallets, Drums, etc...
DEFINATION :Thermal Container equipped with an or Electrical Appliance (mechanical compressor) for the purposes of cooling or heating the air within the Container.
USES :The Refrigerated and heated Containers are equipped with a mechanical refrigeration unit capable of transporting cargo at temperatures from " -25�C to +25�C ", accurate to a tenth of degree.These types of containers are mostly utilized for carriage of food stuff, milk products, poultry products, pharmaceuticals, etc..
DEFINATION :This type of Container except that it has no rigid roof but may have a flexible and movable or removable top end transverse members above their end doors.
USES :These Containers are primarily used to carry heavy and/or bulky finished products, whose handling and loading can only be performed with a crane or a rolling bridge. Tiltable half-height open top Containers are specially designed to carry bulk minerals.Removable roof bows and Tarpaulin.
DEFINATION :Compared to fixed end types collapsible flat - racks which have end walls that fold. The flush folding collapsible flat-rack, the most sophisticated of its type has end walls which fold flush with the base.
USES :Flastracks are dedicated for the carriage of items which are heavy, bulky and those which are over height and/or over width. Their base ids often designed to transport heavy material. Also permit the transportation of over length cargo.
DEFINATION :Platform based container without any permanently fixed longitudinal load-carrying structure b/w ends other than at the base.
USES :This type of Container is mainly used to carry heavy and bulky semi-finished goods, as well as out of gauge cargo. When laid side by on the deck or in the hold of container ships, they can be used to transport non-containerizable cargo. BARRELS AND DRUMS, CRATES, CABLE DRUMS, OUT OF GAUGE CARGO,MACHINERY, AND PROCESSED TIMBER...
The approved storage classes must also be marked. The most sensitive product packaged is used as a basis for determining the storage classes.The supplier of the goods must specify the respective storage class. The selected storage class shall also be documented in plain text in an appropriate place in the accompanying documents of the goods (e.g. delivery note or packing list).
If the package needs to be handled in a particular way, the packaging must be sufficiently marked according to the handling properties (e.g. fragile, top-heavy) to ensure it is handled appropriately. Figure shows the markings which should be used.