Quiz. 2. Which Incoterms rule can be used to transfer title of goods?
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1 Quiz 1. The 2010 Incoterms rules describe the risks and obligations involved in the delivery of goods from seller to buyer. Fill in the blanks: In Incoterms 2010, risk refers to of or to the goods. List at least five obligations that may be assigned to the seller or buyer, depending on the particular Incoterms rule. 1) 2) 3) 4) 5) 2. Which Incoterms rule can be used to transfer title of goods? 3. In order to use the Incoterms rules properly, you should... choose the right. include the rule in your. specify the place/port precisely. 4. Complete the following sentence. In Incoterms 2010, delivery is defined as In Incoterms 2010, packaging refers to which two of the following conditions? a. packaging to comply with the sales contract b. packaging so goods are fit for transport c. stowage of the packaged goods in a container 6. In Incoterms 2010, how are the rules grouped? a. alphabetically, by letter b. all modes vs. maritime only c. international vs. domestic d. import vs. export 7. Which two rules require insurance? You can order a copies of Incoterms 2010 by the International Chamber of Commerce at www. iccbooksusa.com Mohawk Global Trade Advisors
2 INCOTERMS 2010 REFERENCE CHART Import formalities Buyer/ importer premises Incoterms is a trademark of the International Chamber of Commerce mohawk global trade advisors [ ] Seller/ exporter premises 1 Export formalities Named place of terminal Loading port of shipment Onboard ship/rail/ plane Discharging port of arrival Named place or terminal EXW FCA FAS FOB CFR CIF CPT CIP DAT DAP DDP Key: Seller Buyer : the cost of transportation : the risk of loss of or damage to the goods Delivery : where risk passes from seller to buyer This chart is a general outline of costs and risks. For specific guidance, consult Incoterms 2010, published by the International Chamber of Commerce. Only CIF and CIP place an obligation on anyone to purchase cargo insurance. However, it is usually a good idea for the seller or buyer to purchase insurance to protect against risk. 1. The seller is obligated to assist the buyer with obtaining security related information. 2. For FCA, delivery occurs at seller premises or terminal. 3. passes from seller to buyer when the goods are delivered to the first carrier.
3 2014 Mohawk Global Trade Advisors mohawkglobalta.com Incoterms 2010 International Use Rule Delivery Notes EXW FCA CPT DAT DAP DDP
4 2014 Mohawk Global Trade Advisors mohawkglobalta.com Incoterms 2010 International Use Rule Delivery Notes FAS FOB CFR CIF CIP
5 Incoterms 2010 was written to replace the old Uniform Commercial Code (UCC) rules. Fill in the 2010 Incoterms equivalent for each UCC rule Mohawk Global Trade Advisors mohawkglobalta.com Incoterms 2010 Domestic Use UCC Rule 2010 Incoterms Equivalent FOB Origin, freight collect (buyer tasked with loading) FOB Origin Car or Other Vehicle, freight collect (seller tasked with loading) FOB Origin, freight prepaid FOB Destination, freight prepaid FOB Destination, freight collect FAS FOB Vessel C&F and CIF
6 2013 Mohawk Global Trade Advisors Quick Reference Guide Incoterms 2010 Best Terms For Buyers FOB Freight On Board Ocean only. FOB point must be the origin port. Buyer controls ocean freight routing. Seller must deliver the freight to the named origin port. FCA Free Carrier All modes. Best when used from seller s premises but can be from the carrier s terminal at origin. Unlike FOB, the loading charges come forward to the buyer. Buyer controls ocean/air freight routing or in the case of FCA seller s premises, door to door. DAP Delivered At Place All modes. Seller must deliver all the way to the buyer s door and is responsible for any loss along the way. Buyer takes care of Customs clearance. This term is for shipments of replacement parts or when the buyer has little resources to handle international logistics. EXW Ex Works All modes. Buyer takes care of everything once the freight is pushed out of the seller s door and onto a truck. Seller provides documents but the buyer must arrange export formalities at origin (export Customs clearance). EXW seller s premises is the preferred term. Buyer controls freight from door to door. Best Terms For Sellers CFR & Freight Ocean only. CFR point must be a destination ocean port (no inland points allowed, see CPT). Seller controls the freight to the destination port but risk for loss passes to the buyer once goods are onboard at the origin port. CPT Carriage Paid To All modes. CPT point can be inland or to the buyer s door. Seller controls the freight all the way to the CPT point but risk for loss passes when the goods are handed over to the carrier. In many cases this happens at the seller s warehouse, as the goods are loaded on the truck. DAP Delivered At Place All modes. Seller must deliver all the way to the buyer s door and is responsible for any loss along the way. Buyer takes care of Customs clearance. This term is for shipments of replacement parts or when the buyer has little resources to handle international logistics. FCA Free Carrier All modes. Best when used from seller s premises but can also be from the carrier s terminal at origin. Unlike FOB, the loading charges come forward to the buyer. Buyer controls ocean/air freight routing or in the case of FCA seller s premises, door to door. Use FCA Seller s Premises in lieu of EXW to control export filing of AES. This is a general listing. Certain circumstances may dictate the use of other terms. Terms with insurance were not included because, in general, insurance is best handled outside the Incoterms rule. Consult with Mohawk Global Logistics if you are unsure of which rule to use. Incoterms is a trademark of the International Chamber of Commerce.
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