Incoterms vs Incoterms(1+2)

[Former Member]

hi friends.

can u plz tell me difference between Incoterms & Incoterms(1+2)

thank u

[Former Member · Accepted solution]

Hi,

The first field Incoterm - 1 is basically the "trading term"

Eg:

1. Your plant is in <b>PUNE</b> and the customer is in <b>USA</b> and the material will be shipped to the customer from the <b>MUMBAI</b> port. The <b>part 1</b> will be <b>"FOB-free on board"</b>. then in the <b>part 2</b> field you will enter the port of departure say <b>Mumbai</b>. This means that the <b>freight</b> from <b>PUNE</b> to <b>MUMBAI</b> will be <b>free</b> for the customer, i.e you will bear the freight. So the customer will only have to take care of the freight from <b>MUMBAI</b> onwards to his/her place.

2. Your plant is in <b>PUNE</b> and the customer is in <b>THANE</b>. Say <b>part 1</b> is <b>"EXW - exworks"</b> & <b>part 2</b> is <b>PUNE</b>. This means that the price mentioned in the quotation / order is the price in <b>PUNE</b>. The price in <b>THANE</b> will be the price in <b>PUNE</b> + local taxes + octroi as applicable.

3. Customer is in <b>UK</b> & your plant is in <b>MUMBAI</b>. Say <b>part 1</b> is <b>"CFR - costs & freight"</b> & <b>part 2</b> is <b>UK</b>. This means that customer will bear everything <b>cost + freight</b> incurred from <b>Mumbai</b> to <b>UK</b>.

4. Customer is in <b>UK</b> & your plant is in <b>MUMBAI</b>. Say <b>part 1</b> is <b>"CIF - costs + insurance + freight"</b> & <b>part 2</b> is <b>UK</b>. This means that customer will bear everything <b>cost + insurance + freight</b> incurred from <b>Mumbai</b> to <b>UK</b>.

These were some examples. <b>Part 1</b> is basically the <b>agreed trading term</b> and the <b>part 2 is the place of delivery or port of delivery</b> from where the terms are applicable..

Reward points if solution helps.

Regards,

Allabaqsh G. Patil

[Former Member]

hi abhi,

hope u kunderstand what is meant by incoterms. but still then i ll define it for you once again."Incoterms stands for the international commercial terms and conditions for the liability of the freight in transit"

incoterms defined in the sap screens has 2 parts.

the first part defines the terms of liability and the 2nd part describes the shipping pt for which it is applicable.

for eg. part 1: FOB ; part 2 : Hamburg

this implies that till hamburg the freight cost won't be charged to the customer.the customer has to bear the freight cost only from Hamburg to their place.

Hope this clears ur doubt.

plz reward points if u find the reply to be useful.

Thanks & regards,

abhilash

[Former Member]

Hi abhi,

Incoterms are International Commercial Terms.if the material is moving from one country to another country, incoterms plays a vital role.

Incoterms .1

EXB - Ex Wareworks

FOB - Free on Board

Incoterms .2

From which fort the material is moving.

Ex.Buston Port

Hope this Clarifies your doubts and Please Reward If Really Helpful,

Thanks and Regards,

Sateesh.Kandula

[Former Member]

hi friend thanx for reply

but know also i hv doubt ,i think that u want to say incoterm1 is for within country

incoterms2 for foriegn country plz throw some light on this issue

waiting for reply

[Former Member]

Incoterm is

A codification of international rules for the interpretation of the commonly used terms in international trade.

An international commercial term (Incoterm) defines the terms of sale and the passing of risks for import and export of merchandise.

Incoterms include the following:

EXW - Ex Works

FCA - Free Carriage and Freight

FAS - Free Alongside Ship

FOB - Free On Board ship

CFR - Cost and Freight

CIF - Cost, Insurance, and Freight

CPT - Carriage Paid To

CIP - Carriage and Insurance Paid To

DAF - Delivered At Frontier

DES - Delivered Ex Ship

DEQ - Delivered Ex Quay

DDU - Delivered Duty Unpaid

DDP - Delivered Duty Paid