Incoterms for beginners

What is the primary purpose of Incoterms in international trade?

• To define the types of goods that can be traded internationally.

• To standardize the packaging requirements for exported goods.

• To clarify the obligations of buyers and sellers regarding shipping goods to their final destination.

• To set the maximum price limits for imported and exported products.

Under the EXW (Ex Works) Incoterm, who is responsible for picking up the goods from the supplier's location and organizing transportation to the final destination?

• The supplier

• The buyer

• The shipping carrier

• The customs authority

What is the main distinction between CFR (Cost and Freight) and CIF (Cost, Insurance and Freight) Incoterms?

• CFR applies only to air transport, while CIF applies to sea transport.

• Under CIF, the seller is responsible for obtaining insurance for the goods during transit, which is not required under CFR.

• CFR requires the buyer to pay for all terminal charges, while CIF includes them in the seller's cost.

• CIF transfers risk to the buyer at the destination port, while CFR transfers it at the port of loading.

Which Incoterm requires the seller to bear all risks and costs, including import formalities and duties, until the goods are delivered to the specified place of arrival, ready to be unloaded?

• FOB (Free On Board)

• EXW (Ex Works)

• DDP (Delivery Duty Paid)

• DDU (Delivery Duty Unpaid)