Incoterms® 2020 guide

Incoterms® 2020: who pays and who carries the risk Seller Buyer Point where risk passes to the buyer

Incoterms® 2020	Loading at seller's premises	Export clearance	Carriage to port / terminal	Loading on main carrier	Main carriage (freight)	Carriage to named destination	Unloading at destination	Import clearance and duties	Insurance (seller)
EXW Ex Works	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	—
FCA Free Carrier	SellerS	SellerS	SellerS	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	—
FAS Free Alongside Ship Sea only	SellerS	SellerS	SellerS	BuyerB	BuyerB	BuyerB	BuyerB	BuyerB	—
FOB Free on board at the port of loading Sea only	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	BuyerB	BuyerB	—
CFR Freight paid to the port of destination Sea only	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	BuyerB	—
CIF Freight and insurance paid to the port of destination Sea only	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	BuyerB	Minimum cover (ICC C)
CPT Carriage Paid To	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	—
CIP Carriage and Insurance Paid To	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	Broad cover (ICC A)
DAP Delivered to the named place	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	BuyerB	—
DPU Delivered at Place Unloaded	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	—
DDP Delivered Duty Paid	SellerS	SellerS	SellerS	SellerS	SellerS	SellerS	BuyerB	SellerS	—

This table is a general summary. Exact obligations depend on the named place in your contract and the ICC Incoterms® 2020 rules. Incoterms® is a registered trademark of the International Chamber of Commerce.

What are Incoterms?

Incoterms® are rules published by the International Chamber of Commerce (ICC) that define who arranges transport, insurance and customs clearance in international trade, and where the risk passes from seller to buyer. The current version is Incoterms® 2020. In our quotations we always state the term together with a named place, for example "FCA Istanbul" or "CIF Poti".

The terms we use most

EXW (Ex Works): The buyer collects the goods from the manufacturer and handles everything, including export clearance. Because export formalities can be difficult for a foreign buyer, FCA is usually the better choice.
FCA (Free Carrier): We hand the goods, cleared for export, to the buyer's carrier. Suitable for container and truck shipments.
FOB and CIF: For sea transport only; risk passes when the goods are loaded on board at the port of shipment. Under CIF the seller pays freight and minimum insurance.
CPT and CIP: Usable for any mode; the seller pays freight to destination, but risk passes on handover to the first carrier. Under CIP the seller buys broad insurance cover.
DAP: We deliver to the named destination, ready for unloading. Import clearance and duties are for the buyer.

Points to watch

Name the place as precisely as possible: port, terminal or full address.
For containerised cargo, FCA works better than FOB and CPT/CIP better than CFR/CIF, because the container is handed over at the terminal before it is loaded on the vessel.
Under DDP the seller pays import VAT and duties; in many countries this is hard for a foreign seller, so DAP is usually preferred.
Incoterms do not cover payment terms or transfer of ownership; these belong in the sales contract.

Tell us the product you need and its technical details; we will supply it from our sources.

Send a request