Incoterms 2020
Incoterms 2020, published by the International Chamber of Commerce, set out who arranges transport, who insures the goods, who clears customs and where risk passes from seller to buyer. The term you agree on changes the total cost of a transaction — estimate it with our deal calculator.
The seller makes the goods available at its premises. The buyer arranges loading, all transport, export clearance and insurance, and carries the risk from the seller’s door. Rarely used for international trade because it asks the buyer to clear export in the seller’s country.
Risk passes when the goods are placed at the buyer’s disposal at the seller’s premises.
The seller delivers the goods, cleared for export, to the carrier the buyer names at an agreed place. If delivery happens at the seller’s premises, the seller loads the goods. Widely used for containerised cargo.
Risk passes when the goods are delivered to the buyer’s carrier.
The seller pays the freight to the named destination, but risk passes when the goods are handed to the first carrier — often well before arrival. The buyer insures the shipment if it wants cover.
Risk passes when the goods are handed to the first carrier.
As Carriage Paid To, but the seller must also insure the goods for the buyer’s benefit. Incoterms 2020 requires all-risks cover (ICC A). Common for containerised and manufactured cargo.
Risk passes when the goods are handed to the first carrier.
The seller carries the goods to the named destination, ready for unloading. The buyer unloads the goods and clears them for import.
Risk passes when the goods arrive ready for unloading.
The only term where the seller also unloads the goods at the destination. The buyer clears them for import.
Risk passes when the goods are unloaded at the destination.
The seller bears everything — transport, export and import clearance, and duty. It is the maximum obligation a seller can accept, and one many sellers decline to quote.
Risk passes when the goods arrive ready for unloading.
The seller delivers the goods alongside the vessel at the port of shipment and clears them for export. The buyer loads the goods and takes on freight and insurance from that point. Used mainly for bulk cargo.
Risk passes when the goods are placed alongside the vessel.
The seller delivers the goods on board the vessel at the port of shipment and clears them for export. The buyer arranges and pays the main carriage and insurance. Suited to bulk cargo loaded directly onto a vessel.
Risk passes when the goods are on board the vessel.
The seller pays the freight to the destination port, but risk still passes when the goods are loaded on board at the origin port — not on arrival. The buyer insures the voyage and clears import.
Risk passes when the goods are on board at the port of shipment, not on arrival.
As Cost and Freight, but the seller must also insure the goods for the buyer’s benefit. Incoterms 2020 requires only minimum cover (ICC C), so buyers of high-value cargo often arrange their own.
Risk passes when the goods are on board at the port of shipment, not on arrival.
| Term | Export clearance | Main carriage | Insurance | Import clearance |
|---|---|---|---|---|
| EXW | Buyer | Buyer | Buyer | Buyer |
| FCA | Seller | Buyer | Buyer | Buyer |
| CPT | Seller | Seller | Buyer | Buyer |
| CIP | Seller | Seller | Seller | Buyer |
| DAP | Seller | Seller | Buyer | Buyer |
| DPU | Seller | Seller | Buyer | Buyer |
| DDP | Seller | Seller | Seller | Seller |
| FAS | Seller | Buyer | Buyer | Buyer |
| FOB | Seller | Buyer | Buyer | Buyer |
| CFR | Seller | Seller | Buyer | Buyer |
| CIF | Seller | Seller | Seller | Buyer |
Under CIF the seller insures at minimum cover; under CIP, at all-risks cover. Under the other terms neither party is obliged to insure — the party carrying the risk usually does.
Not sure what a term does to your total? Open the deal calculator to see the buyer’s estimated cost under EXW, FOB, CFR, CIF or DDP.
This guide is general information about Incoterms 2020, published by the International Chamber of Commerce. It is not legal advice. Delivery terms should be agreed in writing and checked by an appropriately qualified lawyer in the relevant jurisdiction before use.
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