The proper selection of an Incoterm defines the allocation of costs, risks, and customs responsibilities between the buyer and seller. In the aluminum packaging sector, understanding each term ensures a continuous, safe, and efficient supply to global consumer markets.
Rules for any mode of transportation
EXW (Ex Works / At the factory)
The seller delivers the goods at its own premises. The buyer assumes all costs and risks from the time of loading at the factory, including export clearance. This term requires maximum logistical capacity from the international buyer.
FCA (Free Carrier)
The seller delivers the containers shipped for export to the carrier designated by the buyer at the agreed-upon location. This is highly recommended for the multimodal transport of industrial packaging, as it limits the seller’s risk to the point of origin.
CPT (Carriage Paid To)
The seller pays for the shipment to the agreed-upon destination, but the risk transfers to the buyer upon delivery to the first carrier. This is an efficient option for recurring ground or air shipments.
CIP (Carriage and Insurance Paid To)
Similar to CPT, but the seller is required to purchase comprehensive insurance (Clause A of the Institute Cargo Clauses). It protects the financial value of the metal containers against loss or damage during international transit.
DAP (Delivered at Place)
The seller bears all costs and risks until the goods are ready for unloading at the agreed destination. The buyer is solely responsible for import clearance and payment of the applicable duties.
DPU (Delivered at Place Unloaded)
The seller makes the delivery and bears the cost and risk of unloading the goods from the means of transport at the final destination. It is the only Incoterm that requires the seller to unload the goods, making it ideal for specific logistics terminals.
DDP (Delivered Duty Paid)
The seller assumes the greatest responsibility, delivering the goods to the final destination cleared for import and with customs duties paid. This requires the exporter to have a legal presence or customs facilities in the destination country.
Rules for Maritime and Inland Waterway Transport
FAS (Free Alongside Ship)
The seller delivers the cargo alongside the vessel designated by the buyer at the agreed port of shipment. The seller handles the export clearance. This term is primarily used for bulk cargo or high-volume industrial goods.
FOB (Free on Board)
The seller transfers the risk and costs once the aluminum containers are on board the vessel at the port of origin. This is a long-standing standard in maritime trade that grants the buyer control over the main freight.
CFR (Cost and Freight)
The seller arranges and pays for ocean freight to the designated port of destination. However, the risk of loss or damage to the packaging passes to the buyer at the point of origin, specifically when the goods are already on board the vessel.
CIF (Cost, Insurance and Freight)
The seller pays the cost, freight, and marine insurance to the port of destination. Unlike CIP, under current rules, the minimum level of coverage required under CIF is lower (Clause C), although it is often extended for high-value shipments.
The choice of the appropriate Incoterm should align with your plant’s operational strategy and your customer’s logistics capabilities. Properly evaluating these 11 terms prevents customs surcharges, ensures smooth distribution, and guarantees a continuous supply of packaging solutions.
