Trade Incoterms

Incoterms are internationally accepted commercial terms, which define the role of the buyer and the seller in the trade transaction. The Incoterms address such key issues as who arranges (and pays for) transportation. Incoterms also clarify when ownership of the merchandise takes place and detail the responsibility for the insurance of the goods.

We have detailed some of the more commonly used Incoterms in international trade below.

If you require information on any other Incoterms, please contact your nearest Bendigo Bank international trade manager.

CFR (Cost and Freight)

• The seller quotes a price to a named overseas port of import that includes the cost of transportation to the named point of debarkation.
• The buyer assumes responsibility for insurance of the goods.
• Usually used for ocean shipments.

CIF (Cost Insurance and Freight)

• Seller pays the transportation and insurance cost to the destination port.
• The price of goods quoted to customer includes transportation and insurance costs.

EXW (Ex-Works)

• Price quoted applies at point of origin (ie. factory, plant).
• Title and risk of goods pass to the buyer at the seller's door.
• Buyer needs to arrange insurance/transport from this point.
• Used for any mode of transport.

FAS (Free alongside ship)

• Price of goods and cost to transport alongside ship.
• Seller delivers goods alongside ship.
• Buyer is responsible for freight and insurance from this point.
• Buyer is also responsible for export clearance of the goods.

FOB (Free on Board)

• Buyer pays all transportation costs and insurance once the goods have been delivered to and placed on the ship.
• Used for any mode of transport.