Incoterms have been used in international trade contracts since 1936. These standardized three-letter terms are very useful because they provide an internationally recognized vocabulary for commercial contracts. They inform each party of their respective duties, costs and risks throughout the transport of the merchandise.

Incoterms, however, are not a contract nor will they ever supersede the laws governing the contract. These are only helpful vocabulary for defining the relationship between the Buyer and the Seller. Additionally, while they do define responsibility for the goods during transport, Incoterms do not define where title transfers; nor do they touch on the price payable and transaction currency or credit terms.

Departure: The seller makes the goods available at the named place
EXW (EX Works)(named place of delivery)	Carriage	Buyer arranges transport of goods from the seller's named place.
	Risks	This term places the maximum obligation on the buyer and minimum obligations on the seller.
	Costs	Costs transfer from seller to buyer when the goods are made available to the buyer at the seller's "named place"
Main Carriage Unpaid: The seller/exporter is only responsible to deliver the goods to a carrier named by the buyer.
FCA (Free Carrier) (named place of delivery)	Carriage	Main transportation is arranged by the buyer or the seller on behalf of the buyer
	Risks	Risk transfers from the seller to the buyer when the goods have been delivered to the carrier at the "named place."
	Costs	Costs transfer from the seller to the buyer when the goods have been delivered to the carrier at the "named place."
FAS (Free Alongside Ship)(named port of shipment)	Carriage	Main carriage of goods is arranged by the buyer.
	Risks	Risk transfers from the seller to the buyer when the goods have been placed alongside the ship at the "named place of shipment."
	Costs	Costs transfer from the seller to the buyer when the goods have been placed alongside the ship at the "named place of shipment."
FOB (Free on Board) (named port of shipment)	Carriage	Main carriage of goods is arranged by the buyer.
	Risks	Risk transfers from the seller to the buyer when the goods pass the ship's rail at the "named port of shipment."
	Costs	Costs transfer from the seller to the buyer when the goods pass the ship's rail at the "named port of shipment."
Main Carriage Paid: the seller contracts & pays for carriage, but is not responsible for the costs or risks once the goods have been shipped.
CFR (Cost & Freight)(named port of destination)	Carriage	Carriage of the goods to the "named port of destination" is arranged by the seller. Onward carriage is arranged by the buyer.
	Risks	Risk transfers from the seller to the buyer at the ship's rail at the "named port of shipment." (not destination)
	Costs	Costs transfer from the seller to the buyer at the "named port of destination."
CIF (Cost, Insurance & Freight) (named port of destination)	Carriage	Carriage and insurance to the "named port of destination" is arranged by the seller. Onward carriage is arranged by the buyer.
	Risks	Risk transfers from the seller to the buyer at the ship's rail at the "named port of shipment." (not destination)
	Costs	Costs transfer from the seller to the buyer at the "named port of destination."
CPT (Carriage Paid To) (named place of destination)	Carriage	Carriage of the goods to the "named place of destination" is arranged by the seller.
	Risks	Risk transfers from the seller to the buyer when the goods have been delivered to the (first) carrier.
	Costs	Costs transfer from the seller to the buyer at the "named port of destination."
CIP (Carriage and Insurance Paid To) (named place of destination)	Carriage	Carriage and insurance to the "named place of destination" is arranged by the seller.
	Risks	Risk transfers from the seller to the buyer when the goods have been delivered to the (first) carrier.
	Costs	Costs transfer from the seller to the buyer at the "named port of destination."
Arrival: The seller is responsible for all costs associated with bringing goods to the "named place or port."
DAT (Delivered at Terminal) (named terminal at port or place of destination)	Carriage	Seller arranges carriage to the "named terminal at the port or place of destination."
	Risks	Risk transfers from the seller to the buyer once the goods are unloaded at the terminal.
	Costs	Costs transfer from the seller to the buyer at the terminal where goods are unloaded. Seller bear majority of costs save for import duties.
DAP – Delivered at Place (named place of destination)	Carriage	Seller arranges carriage to the "named place of destination."
	Risks	Risk transfers from seller to buyer when goods are unloaded from the carrier.
	Costs	Costs transfer from seller to buyer when goods are unloaded from the carrier.
DDP – Delivered Duty Paid (named place of destination)	Carriage	Carriage of the goods to the "named place of destination"is arranged by the seller.
	Risks	Risk transfers from the seller to the buyer once the goods are made available to the buyer at the "named place of destination"
	Costs	Costs transfer from the seller to the buyer once the goods are made available to the buyer at the "named place of destination"