The Importance of IncoTerms for Shipments to Mauritius

The Importance of IncoTerms for Shipments to Mauritius

What is IncoTerms® you may ask? It stands for International Commercial Terms and is a defined set of commercial guidelines for international trade facilitation. Whether you are looking at global or local sales transactions, the use of IncoTerms is necessary, as it a standard in the logistics industry. Thus the importance of IncoTerms for shipments to Mauritius is a given, as it is to any country in the world.

IncoTerms are rules that govern trading with a series of three-letter terms, which are abbreviations for their respective rule. These rules for trading is used to communicate the various tasks associated with the transactions, costs as well as risk that will be borne either by the seller or the buyer.  These terms are used accepted by governments, and legal authorities making it a norm in the logistics arena. There are 11 IncoTerms since the most recent revision in 2010, which became effective from 2011. The IncoTerms include the following and essentially refers to the risks and costs associated with trading;

Sea/Inland Waterways Transport FAS Free Alongside Ship Risk falls on buyer, inclusive of transport and insurance costs. Clearing is seller’s responsibility
FOB Free On Board Risk falls on buyer, including transport and insurance costs. Clearing and loading costs fall on buyer.
CFR Cost and Freight Seller delivers cargo, risk falls on buyer when onboard the shipping vessel. Seller agrees to pay cost &  freight at destination port
CIF Cost, Insurance, Freight Similar to CFR; Seller delivers cargo, risk falls on buyer when onboard the vessel. Costs, freight and insurance is borne y seller.
Any Modes of Transport EXW Ex-Works Seller delivers goods without loading at seller’s property.  Minimal liability incurred by seller. Goods thereafter are at disposal of buyer.
FCA Free Carrier Seller delivers the goods to carrier, seller may also be responsible for clearing goods for export as well as loading of goods at pick-up.
CPT Carriage Paid To Seller delivers the goods to carrier at agreed location,  risk is they shifted to buyer. However, seller may bear cost of carriage to the destination
CIP Carriage and Insurance Paid To Seller delivers the goods to carrier at agreed location,  risk is they shifted to buyer. However, seller may bear cost of carriage and insurance to the destination
DAT Delivered at Terminal Seller bears, risk, costs and responsibility for goods are delivered at named location (warehouse/quay/terminal/yard/etc). Seller may bear demurrage or detention fees. Seller clears goods for export only
DAP Delivered at Place Seller bears, risk, costs and responsibility for goods until it is available to buyer at destination. Seller clears goods for export only
DDP Delivered Duty Paid Seller bears, risk, costs and responsibility for cleared goods until it is available to buyer at destination. Buyer bears unloading responsibility. Seller is responsible for import clearance, duties, taxes.

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