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Wani Global Trade

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Incoterms 2020

Incoterms (International Commercial Terms) are standardized rules established by the International Chamber of Commerce (ICC) to define the responsibilities, costs, and risks of buyers and sellers in international and domestic trade. They clarify who handles tasks like transportation, insurance, customs clearance, and payment of duties. The latest version, Incoterms 2020, includes 11 terms, divided into two categories: rules for any mode of transport and rules for sea/inland waterway transport. Below is a detailed explanation of each Incoterm, including responsibilities, transfer of risk, and typical use cases.

EXW - Ex Works

The seller makes goods available at their premises; buyer bears all costs and risks.

  • Seller: Prepares goods and makes them available at their location.
  • Buyer: Arranges transport, insurance, customs clearance, and bears all costs/risks.
  • Risk Transfer: At seller’s premises.
  • Use Case: Ideal for buyers with strong logistics or domestic trade.
  • Note: Buyer handles export/import formalities, which can be complex.

FCA - Free Carrier

Seller delivers to a carrier; buyer assumes risks after delivery.

  • Seller: Delivers to buyer’s carrier and handles export clearance.
  • Buyer: Arranges transport, insurance, import clearance.
  • Risk Transfer: When goods are handed to the carrier.
  • Use Case: Flexible for various transport modes; common for containers.
  • Note: Seller may assist with loading, depending on agreement.

CPT - Carriage Paid To

Seller pays for transport; risk transfers to buyer at first carrier.

  • Seller: Arranges and pays for transport to destination; handles export clearance.
  • Buyer: Bears risks after first carrier, arranges insurance, import clearance.
  • Risk Transfer: At first carrier.
  • Use Case: For buyers who want seller to arrange transport.
  • Note: Insurance is buyer’s responsibility unless agreed otherwise.

CIP - Carriage and Insurance Paid To

Seller pays for transport and insurance; risk transfers at first carrier.

  • Seller: Arranges and pays for transport, insurance to destination; handles export clearance.
  • Buyer: Bears risks after first carrier, arranges import clearance.
  • Risk Transfer: At first carrier.
  • Use Case: Preferred for seller-provided insurance.
  • Note: Minimal insurance; buyers may need additional coverage.

DAP - Delivered at Place

Seller delivers to destination; buyer handles unloading, import clearance.

  • Seller: Arranges transport to destination, handles export clearance.
  • Buyer: Unloads goods, arranges import clearance.
  • Risk Transfer: At named destination.
  • Use Case: For buyers handling import but wanting seller transport.
  • Note: Seller bears transport risk, favorable for buyers.

DPU - Delivered at Place Unloaded

Seller delivers and unloads; buyer handles import clearance.

  • Seller: Arranges, pays for, and unloads goods at destination.
  • Buyer: Arranges import clearance, pays duties.
  • Risk Transfer: When goods are unloaded.
  • Use Case: Ideal when seller can unload at destination.
  • Note: Only Incoterm where seller unloads.

DDP - Delivered Duty Paid

Seller handles all costs, including duties, until delivery.

  • Seller: Arranges transport, insurance, duties, export/import clearance.
  • Buyer: Unloads goods at destination.
  • Risk Transfer: At buyer’s premises.
  • Use Case: Maximum convenience for buyers; common in e-commerce.
  • Note: Seller needs import regulation knowledge; may incur extra costs.

FAS - Free Alongside Ship

Seller delivers alongside ship; buyer assumes risks thereafter.

  • Seller: Delivers alongside ship, handles export clearance.
  • Buyer: Loads goods, arranges transport, insurance, import clearance.
  • Risk Transfer: Alongside ship.
  • Use Case: Used for bulk cargo where buyer controls vessel.
  • Note: Rarely used due to modern container shipping complexity.

FOB - Free on Board

Seller delivers on board ship; buyer assumes risks thereafter.

  • Seller: Delivers on board ship, handles export clearance.
  • Buyer: Arranges transport, insurance, import clearance.
  • Risk Transfer: On board ship.
  • Use Case: Common for bulk shipments; widely used in maritime trade.
  • Note: Misused in container shipping; FCA often more appropriate.

CFR - Cost and Freight

Seller pays for transport to port; risk transfers on board ship.

  • Seller: Arranges and pays for transport to destination port.
  • Buyer: Bears risks after goods are on board, arranges insurance, unloading.
  • Risk Transfer: On board ship.
  • Use Case: For buyers wanting seller to cover freight costs.
  • Note: Insurance is buyer’s responsibility.

CIF - Cost, Insurance, and Freight

Seller pays for transport and insurance; risk transfers on board ship.

  • Seller: Arranges transport, insurance to destination port.
  • Buyer: Bears risks after goods are on board, arranges unloading, import clearance.
  • Risk Transfer: On board ship.
  • Use Case: Common for maritime trade with seller-provided insurance.
  • Note: Minimal insurance; buyers may need additional coverage.
HSN Code

HSN (Harmonized System of Nomenclature) is a globally accepted classification system developed by the World Customs Organization (WCO) to standardize the identification of goods in international trade.

Purpose & Global Usage

Introduced in 1988, the HSN system is used by more than 200 countries and covers nearly 98% of global merchandise trade, ensuring uniform classification and trade transparency.

HSN Code Structure

  • First 2 digits – Product Chapter
  • Next 2 digits – Heading
  • Next digits – Sub-heading & national extensions
  • India uses up to 8-digit HSN codes

Importance in Import–Export

  • Smooth customs clearance
  • Correct duty & GST calculation
  • Avoids shipment delays and penalties
  • Ensures global compliance

HSN & GST Compliance (India)

  • Up to ₹5 Cr turnover – 4-digit HSN
  • Above ₹5 Cr turnover – 6-digit HSN
  • Exports & imports – Mandatory 8-digit HSN

Regulatory Updates & Verification

The HSN system is periodically updated by WCO (typically every 5 years) to reflect changes in technology and trade patterns. Indian businesses should always verify HSN codes using official CBIC, GST Portal, or DGFT notifications to remain compliant.

PDF Download HSN Code List
Container Specification

Containers are the backbone of global trade, enabling the safe and efficient transport of goods by sea, road, rail, or air. These standardized steel boxes, built to ISO specifications, come in various types to suit diverse cargo needs. Below, we explore the key container types used in import and export, detailing their sizes, features, and applications to help you choose the right one for your shipments.

Dry Container (Standard Container)

Used for general cargo that does not require temperature control or special handling.

  • Purpose: Used for general cargo that does not require temperature control or special handling.
  • Sizes and Specifications:
    • 10-foot Dry Container (rare):
      • External Dimensions: 10 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~9.8 ft (L) x 7.7 ft (W) x 7.9 ft (H).
      • Capacity: ~15.9 cubic meters.
      • Max Gross Weight: ~10,160 kg.
      • Tare Weight (empty): ~1,300 kg.
      • Payload: ~8,860 kg.
    • 20-foot Dry Container (1 TEU - Twenty-foot Equivalent Unit):
      • External Dimensions: 20 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~19.4 ft (L) x 7.8 ft (W) x 7.9 ft (H).
      • Capacity: ~33.2 cubic meters.
      • Max Gross Weight: ~30,480 kg (varies by carrier).
      • Tare Weight: ~2,300 kg.
      • Payload: ~28,180 kg.
    • 40-foot Dry Container (2 TEUs):
      • External Dimensions: 40 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~39.5 ft (L) x 7.8 ft (W) x 7.9 ft (H).
      • Capacity: ~67.7 cubic meters.
      • Max Gross Weight: ~32,500 kg.
      • Tare Weight: ~3,800 kg.
      • Payload: ~28,700 kg.
    • 40-foot High Cube (HC):
      • External Dimensions: 40 ft (L) x 8 ft (W) x 9.5 ft (H).
      • Internal Dimensions: ~39.5 ft (L) x 7.8 ft (W) x 8.9 ft (H).
      • Capacity: ~76.4 cubic meters.
      • Max Gross Weight: ~32,500 kg.
      • Tare Weight: ~4,000 kg.
      • Payload: ~28,500 kg.
  • Cargo Examples: Electronics, textiles, furniture, dry food (e.g., rice, grains), machinery, consumer goods, packaged chemicals.
  • Features:
    • Fully enclosed with corrugated steel walls and roof.
    • Marine-grade plywood floor, treated for pest resistance.
    • Weatherproof seals on doors to protect against water and dust.
    • Double doors at one end with locking rods.
    • Forklift pockets (in 20-foot containers) for ground handling.
    • Corner castings for lifting and stacking.
    • No ventilation or refrigeration systems.
  • Notes: Most common container type, suitable for both FCL (Full Container Load) and LCL (Less than Container Load) shipments.

Reefer Container (Refrigerated Container)

Used for perishable or temperature-sensitive cargo requiring controlled environments.

  • Purpose: Used for perishable or temperature-sensitive cargo requiring controlled environments.
  • Sizes and Specifications:
    • 20-foot Reefer:
      • External Dimensions: 20 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~18.3 ft (L) x 7.5 ft (W) x 7.5 ft (H).
      • Capacity: ~28 cubic meters (reduced due to insulation).
      • Max Gross Weight: ~30,480 kg.
      • Tare Weight: ~3,000 kg.
      • Payload: ~27,480 kg.
    • 40-foot Reefer:
      • External Dimensions: 40 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~38.5 ft (L) x 7.5 ft (W) x 7.5 ft (H).
      • Capacity: ~67 cubic meters.
      • Max Gross Weight: ~32,500 kg.
      • Tare Weight: ~4,800 kg.
      • Payload: ~27,700 kg.
    • 40-foot High Cube Reefer:
      • External Dimensions: 40 ft (L) x 8 ft (W) x 9.5 ft (H).
      • Internal Dimensions: ~38.5 ft (L) x 7.5 ft (W) x 8.5 ft (H).
      • Capacity: ~75 cubic meters.
      • Max Gross Weight: ~32,500 kg.
      • Tare Weight: ~4,900 kg.
      • Payload: ~27,600 kg.
  • Temperature Range: -30°C to +30°C, with precise control (±0.5°C).
  • Cargo Examples: Fruits (e.g., bananas, mangoes), vegetables, seafood, meat, dairy, pharmaceuticals, flowers, temperature-sensitive chemicals.
  • Features:
    • Insulated walls and floors (polyurethane foam) with stainless-steel interiors.
    • Built-in refrigeration unit (e.g., Carrier, Thermo King) powered by external electricity or gensets.
    • T-shaped floor for air circulation under cargo.
    • Data loggers to monitor temperature, humidity, and CO₂ levels.
    • Ventilation systems to manage ethylene gas (from ripening fruits).
    • Corner castings for lifting and stacking.
  • Notes: Essential for cold chain logistics; requires pre-trip inspection (PTI) to ensure refrigeration functionality.

Open Top Container

Used for cargo that is too tall, bulky, or difficult to load through standard container doors.

  • Purpose: Used for cargo that is too tall, bulky, or difficult to load through standard container doors.
  • Sizes and Specifications:
    • 20-foot Open Top:
      • External Dimensions: 20 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~19.4 ft (L) x 7.8 ft (W) x 7.8 ft (H).
      • Capacity: ~32 cubic meters.
      • Max Gross Weight: ~30,480 kg.
      • Tare Weight: ~2,400 kg.
      • Payload: ~28,080 kg.
    • 40-foot Open Top:
      • External Dimensions: 40 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~39.5 ft (L) x 7.8 ft (W) x 7.8 ft (H).
      • Capacity: ~66 cubic meters.
      • Max Gross Weight: ~32,500 kg.
      • Tare Weight: ~3,850 kg.
      • Payload: ~28,650 kg.
  • Cargo Examples: Heavy machinery, turbines, large pipes, timber, marble blocks, construction materials.
  • Features:
    • Open roof covered with a removable tarpaulin or canvas.
    • Reinforced floor to support heavy loads.
    • Double doors at one end; some models have side doors.
    • Lashing rings and tie-down points for securing cargo.
    • Corner castings for lifting and stacking.
  • Notes: Allows top-loading with cranes; tarpaulin must be customs-sealed.

Flat Rack Container

Used for oversized, heavy, or irregularly shaped cargo that cannot fit in standard containers.

  • Purpose: Used for oversized, heavy, or irregularly shaped cargo that cannot fit in standard containers.
  • Sizes and Specifications:
    • 20-foot Flat Rack:
      • External Dimensions: 20 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~19.4 ft (L) x 7.8 ft (W).
      • Max Gross Weight: ~34,000 kg.
      • Tare Weight: ~2,800 kg.
      • Payload: ~31,200 kg.
    • 40-foot Flat Rack:
      • External Dimensions: 40 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Internal Dimensions: ~39.5 ft (L) x 7.8 ft (W).
      • Max Gross Weight: ~45,000 kg.
      • Tare Weight: ~5,200 kg.
      • Payload: ~39,800 kg.
  • Cargo Examples: Vehicles (trucks, buses), construction equipment (cranes, bulldozers), wind turbine blades, steel structures, boats.
  • Features:
    • Open sides and top with fixed or collapsible end walls.
    • Heavy-duty steel frame to support oversized loads.
    • Multiple lashing points and stanchions for securing cargo.
    • Corner castings for lifting and stacking.
    • Collapsible models save space when empty.
  • Notes: Used for breakbulk cargo; requires specialized handling equipment.

Tank Container

Used for transporting liquids, gases, or bulk powders.

  • Purpose: Used for transporting liquids, gases, or bulk powders.
  • Sizes and Specifications:
    • 20-foot Tank Container:
      • External Dimensions: 20 ft (L) x 8 ft (W) x 8.5 ft (H).
      • Capacity: 20,000–26,000 liters (depending on tank thickness).
      • Max Gross Weight: ~30,480 kg.
      • Tare Weight: ~3,500–4,000 kg.
      • Payload: ~26,480–27,000 kg.
  • Cargo Examples: Food-grade liquids (edible oils, wine, juices), chemicals (acids, solvents), petroleum, liquefied gases (LNG, LPG), hazardous materials.
  • Features:
    • Cylindrical tank (stainless steel or aluminum) within an ISO-compliant steel frame.
    • Top and bottom valves for loading/unloading.
    • Insulation or heating/cooling systems for temperature-sensitive liquids.
    • Baffle plates to prevent liquid surging during transport.
    • Corner castings for lifting and stacking.
  • Notes: Certified for hazardous cargo; requires cleaning between shipments to avoid contamination.

Ventilated Container

For cargo requiring air circulation to prevent moisture or mold.

  • Purpose: For cargo requiring air circulation to prevent moisture or mold.
  • Sizes: 20-foot and 40-foot.
    • 20-foot: Similar to 20-foot dry container (~33 m³ capacity).
    • 40-foot: Similar to 40-foot dry container (~67 m³ capacity).
  • Cargo Examples: Coffee beans, cocoa, spices, tobacco.
  • Features: Ventilation openings for air circulation.
  • Notes: Prevents moisture buildup for sensitive cargo.

Insulated Container

For cargo sensitive to temperature changes but not requiring active refrigeration.

  • Purpose: For cargo sensitive to temperature changes but not requiring active refrigeration.
  • Sizes: 20-foot and 40-foot.
    • 20-foot: ~30 m³ capacity.
    • 40-foot: ~65 m³ capacity.
  • Cargo Examples: Electronics, certain chemicals, sensitive materials.
  • Features: Thick insulation (polyurethane foam); no refrigeration unit.
  • Notes: Protects against external temperature fluctuations.

Bulk Container

For dry bulk cargo loaded directly into the container.

  • Purpose: For dry bulk cargo loaded directly into the container.
  • Sizes: 20-foot and 40-foot.
    • 20-foot: ~32 m³ capacity.
    • 40-foot: ~66 m³ capacity.
  • Cargo Examples: Grains (wheat, corn), cement, powders, minerals.
  • Features: Top hatches for loading; bottom discharge ports for unloading.
  • Notes: Designed for loose, unpackaged cargo.

Half-Height Container

For dense, heavy cargo requiring lower height.

  • Purpose: For dense, heavy cargo requiring lower height.
  • Sizes: 20-foot and 40-foot (height ~4.25 ft).
    • 20-foot: ~15 m³ capacity; Max Gross Weight: ~30,480 kg.
    • 40-foot: ~30 m³ capacity; Max Gross Weight: ~32,500 kg.
  • Cargo Examples: Ores, coal, steel coils, heavy aggregates.
  • Features: Lower center of gravity; open top or covered variants.
  • Notes: Ideal for heavy cargo with high density.

Car Carrier Container

For transporting vehicles.

  • Purpose: For transporting vehicles.
  • Sizes: Typically 40-foot (~67 m³ capacity).
  • Cargo Examples: Cars, motorcycles, small trucks.
  • Features: Internal racks or frames to secure multiple vehicles.
  • Notes: Maximizes vehicle transport efficiency.
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