1. Incoterms:
Framework for Success
January 27, 2011
Presenter: Steve Rubinson
Licensed US Customs Broker
By PresenterMedia.com

2. Who is the International
Chamber of Commerce
(ICC)?
http://www.iccwbo.org/

3. Why are we here?
Goals for this session:
1. ASK QUESTIONS!
2. PARTICIPATE In The Discussion!
3. Learn more about using Incoterms rules as a tool to
effectively perform international business
4. Equip ourselves to become more effective
international business-people

4. Introduction
Critical Success Factors
Senior-Level Information
for International Business
Transactions Commitment Flows
• Senior management commitment
– doing business internationally is
more demanding, and requires
different resources, skills and Successful
experience than domestic
transactions.
International
• Effective and accurate Business
information flows protect your
ability to do business
Transactions
internationally.
• Service providers can make or
break your international sales. Incoterms Service
Choose them well. Rules Providers
• Using clear Incoterms rules
reduces uncertainty between the
international buyer and seller.

5. INCOTERMS Rules
Five Questions To Answer
Who? Who uses Incoterms rules?
What? What are Incoterms rules?
Where? Where are Incoterms rules used?
When? When are Incoterms rules used?
Why? Why are Incoterms rules useful for international business?

6. Who? • Business owners
• Customer service
• Finance
• Senior executives
• Sales
Many people involved • Logistics
in your business can
benefit from
understanding • Trade Compliance
Incoterms rules

7. What?
Incoterms rules are a
set of internationally
recognized ways to
describe business
transactions

8. Incoterms® – International Commercial Terms
The Incoterms® rules are an internationally recognized standard and are
used worldwide in international and domestic contracts for the sale of
goods. First published in 1936, Incoterms® rules provide internationally
accepted definitions and rules of interpretation for most common
commercial terms.
The rules have been developed and maintained by experts and
practitioners brought together by ICC and have become the standard in
international business rules setting. They help traders avoid costly
misunderstandings by clarifying the tasks, costs and risks involved in the
delivery of goods from sellers to buyers. Incoterms® rules are recognized by
UNCITRAL as the global standard for the interpretation of the most common
terms in foreign trade.
Please note that all contracts made under INCOTERMS® 2000 remain valid
even after 2011. Moreover, although we recommend using Incoterms®
2010 after 2011, parties to a contract for the sale of goods can agree to
choose any version of the Incoterms rules after 2011. It is important however
to clearly specify the chosen version INCOTERMS® 2010, INCOTERMS® 2000
or any earlier version.
Source: http://www.iccwbo.org/incoterms

9. Incoterms 2000 Rules Chart 1
TERM EXW FCA FAS FOB CFR CIF CPT
Ex-Works Free Carrier Free Alongside Ship Free On-Board Vessel Cost & Freight Cost Insurance & Freight Carriage Paid to
SERVICE
WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays
Warehouse storage at point of origin
Seller Seller Seller Seller Seller Seller Seller
Warehouse labor at point of origin
Seller Seller Seller Seller Seller Seller Seller
Export packing
Seller Seller Seller Seller Seller Seller Seller
Loading at point of origin
Buyer Seller Seller Seller Seller Seller Seller
Inland freight
Buyer Buyer Seller Seller Seller Seller Seller
Port receiving charges
Buyer Buyer Seller Seller Seller Seller Seller
Forwarders fee
Buyer Buyer Seller Seller Seller Seller Seller
Loading on ocean carrier
Buyer Buyer Buyer Seller Seller Seller Seller
Ocean/Air freight charges
Buyer Buyer Buyer Buyer Seller Seller Seller
Charges at foreign Port/Airport
Buyer Buyer Buyer Buyer Buyer Buyer Seller
Customs, Duties & Taxes abroad
Buyer Buyer Buyer Buyer Buyer Buyer Buyer
Delivery charges to final destination
Buyer Buyer Buyer Buyer Buyer Buyer Buyer

10. Incoterms 2000 Rules Chart 2
TERM CIP DAF DES DEQ DDU DDP
Carriage & Insurance Paid To Delivery At Frontier Delivered Ex-Ship Delivered Ex-Quay, Duty Unpaid Delivered Duty Unpaid Delivered Duty Paid
SERVICE
WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays
Warehouse storage at point of origin
Seller Seller Seller Seller Seller Seller
Warehouse labor at point of origin
Seller Seller Seller Seller Seller Seller
Export packing
Seller Seller Seller Seller Seller Seller
Loading at point of origin
Seller Seller Seller Seller Seller Seller
Inland freight
Seller Seller Seller Seller Seller Seller
Port receiving charges
Seller Seller Seller Seller Seller Seller
Forwarders fee
Seller Seller Seller Seller Seller Seller
Loading on ocean carrier
Seller Seller Seller Seller Seller Seller
Ocean/Air freight charges
Seller Seller Seller Seller Seller Seller
Charges at foreign Port/Airport
Seller Seller Buyer Seller Seller Seller
Customs, Duties & Taxes abroad
Buyer Buyer Buyer Buyer Buyer Seller
Delivery charges to final destination
Buyer Buyer Buyer Buyer Seller Seller

11. Incoterms 2010 Rules Part 1
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW EX WORKS
FCA FREE CARRIER
CPT CARRIAGE PAID TO
CIP CARRIAGE AND INSURANCE PAID TO
DAT DELIVERED AT TERMINAL
DAP DELIVERED AT PLACE
DDP DELIVERED DUTY PAID

12. Incoterms 2010 Rules Part 2
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS FREE ALONGSIDE SHIP
FOB FREE ON BOARD
CFR COST AND FREIGHT
CIF COST INSURANCE AND FREIGHT

13. INCOTERMS Rules Comparison
Incoterms 2010 rules
• For both domestic and international Incoterms 2000 rules
transactions
• 11 rules in 2 categories • Primarily for international
transactions
• Eliminates “Ship’s Rail” term
• 13 rules in 4 categories
• Addition of guidance notes for each
Incoterms rule • “Ship’s Rail” terminology used

14. • The International Chamber
Where? of Commerce has the
support of a global
membership
• Incoterms rules are
recognized and used on
agreement by ICC
members and non-members
alike
Anywhere you do
business! • No membership fees or
costs to use Incoterms rules

15. • There is no time like the
When? present!
• Consider adopting Incoterms
rules as a matter of company
policy
• Global implementation is not
required. Incoterms rules may
be implemented regionally,
locally or even in selected
shipping lanes
Use Incoterms rules
when you buy or sell • Many companies use
anything – Incoterms rules only to ship
domestically or
internationally
internationally

16. Benefits of using Incoterms rules:
Why?
1. Standardize how you do business
2. Strengthen internal controls
3. Avoid delays caused by problems
with documentation
4. Prevent disputes over “who pays
for what”
5. Protect your ability to do business
internationally
Incoterms rules can
6. Declare the correct value for
make the difference imports and exports – the first time!
between success and
failure.

17. QUESTIONS?