Incoterms 2020
Incoterms 2020 are crucial for defining the responsibilities of buyers and sellers in international trade. This page provides a brief overview of key terms and their significance. For a more detailed understanding, including the complete list of Incoterms and their applications, click the link below to download a comprehensive PDF overview. This resource will help you navigate the complexities of global shipping.
Incoterms 2020 wallchart
EXW | Ex Works
EXW (Ex Works) under Incoterms® 2020 indicates that the seller's obligation is fulfilled once the goods are made available for pickup at a named location, such as the seller’s premises or a warehouse. The seller is not responsible for loading the goods or clearing them for export. The buyer assumes all risks and costs once the goods are placed at their disposal, including transport, export duties, and customs clearance. It’s essential for the parties to specify the exact point of delivery to avoid ambiguity regarding the transfer of risk and cost responsibilities. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
FCA | Free Carrier
FCA (Free Carrier) under Incoterms® 2020 specifies that the seller delivers goods to a buyer-designated carrier or location, transferring risks and costs upon delivery. Delivery can occur at the seller's premises, requiring the seller to load goods onto the buyer's transport, or at another named location where the seller provides goods ready for unloading. The seller handles export formalities, while the buyer assumes import and transit responsibilities. Precision in naming the delivery point is critical to avoid disputes over risk and cost transfers. This term applies to all transport modes. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
CPT | Carriage Paid To
CPT (Carriage Paid To) under Incoterms® 2020 specifies that the seller delivers goods and transfers risk to the buyer by handing them to a carrier. While the seller arranges carriage to the named destination, the risk transfers at the point of handover to the carrier, not the destination. This rule supports all transport modes and can involve multiple carriers. Clear specification of delivery and destination points in contracts is crucial. Export clearance is the seller's responsibility, while import clearance and unloading at the destination fall to the buyer unless agreed otherwise. Blue indicates seller’s, Gold indicates buyer’s and Green indicates mixed or shared transport obligations, costs and risks. (Source: ICC)
CIP | Carriage and Insurance Paid To
CIP (Carriage and Insurance Paid To) under Incoterms® 2020 specifies that the seller delivers goods and transfers risk to the buyer by handing them over to a carrier. Unlike CPT, the seller must also procure insurance covering the buyer’s risk of loss or damage during transport, up to the named destination. The insurance must meet stringent requirements, including 110% of the goods’ value. The risk transfer occurs at the point of delivery to the carrier, not the final destination. Both delivery and destination points must be clearly defined in the contract. Blue indicates seller’s, Gold indicates buyer’s and Green indicates mixed or shared transport obligations, costs and risks. (Source: ICC)
DAP | Delivered at Place
DAP (Delivered at Place) under Incoterms® 2020 specifies that the seller delivers goods and transfers risk to the buyer when the goods are made available on the arriving transport, ready for unloading, at the named place of destination. The seller handles all export formalities and transportation costs up to this point but does not unload the goods or clear them for import. The buyer assumes all risks and costs from the time of delivery, including import clearance and any unloading charges unless otherwise agreed. Precise delivery points should be clearly stated in the contract. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
DPU | Delivered at Place Unloaded
DPU (Delivered at Place Unloaded) under Incoterms® 2020 requires the seller to deliver goods, unloaded from the transport, at a named place of destination. The seller bears all risks and costs, including unloading, until delivery is complete. This rule is unique as it mandates the seller to handle unloading. Import clearance and costs after delivery are the buyer’s responsibility. Clear identification of the delivery point is crucial to define risk transfer and cost allocation. If unloading is excluded, consider using DAP instead. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
DDP | Delivered Duty Paid
DDP (Delivered Duty Paid) under Incoterms® 2020 requires the seller to deliver goods, cleared for import and ready for unloading, at a named destination. The seller bears all risks and costs, including import duties and taxes, until delivery. DDP represents the highest seller obligation among Incoterms® rules, making clear identification of the delivery point essential for cost and risk transfer. Buyers are responsible for unloading costs unless otherwise agreed. Sellers unable to manage import clearance should consider DAP or DPU instead to reduce their liabilities. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
FAS | Free Alongside Ship
FAS (Free Alongside Ship) under Incoterms® 2020 obligates the seller to deliver goods alongside the buyer’s nominated ship at a named port. Risks and costs transfer to the buyer at this point. The seller is responsible for export clearance but not import clearance or transit. This rule applies only to sea or inland waterway transport. Precise identification of the loading point is critical, as seller costs and risks vary by port practices. Buyers handle carriage, import duties, and ensure the vessel is ready to load within agreed timelines. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
FOB | Free On Board
FOB (Free On Board) under Incoterms® 2020 specifies that the seller delivers goods by placing them on board a vessel nominated by the buyer at a named port. Risks and costs transfer to the buyer once the goods are aboard. FOB applies only to sea or inland waterway transport and excludes scenarios involving container terminals, where FCA might be more suitable. The seller handles export clearance, but the buyer takes responsibility for import clearance, carriage, and ensuring the vessel’s readiness for loading. Precise port instructions ensure smooth operations. Blue indicates seller’s and Gold indicates buyer’s transport obligations, costs and risks. (Source: ICC)
CFR | Cost and Freight
CFR (Cost and Freight) under Incoterms® 2020 defines that the seller delivers goods on board a vessel or procures such delivery, with the cost of carriage to the named port of destination covered by the seller. However, the risk transfers to the buyer once the goods are aboard the vessel. This term is used exclusively for sea or inland waterway transport. Buyers are advised to secure insurance, as the seller is not obligated to do so. Clarity in shipment and destination ports helps avoid disputes. Blue indicates seller’s, Gold indicates buyer’s and Green indicates mixed or shared transport obligations, costs and risks. (Source: ICC)
CIF | Cost Insurance and Freight
CIF (Cost, Insurance, and Freight) under Incoterms® 2020 specifies that the seller delivers goods onboard a vessel or procures their delivery and pays for both transport and insurance to the named destination port. Risk transfers to the buyer when the goods are loaded onto the vessel at the port of shipment. This rule is suitable for sea or inland waterway transport and requires the seller to provide minimum insurance cover. Buyers should clearly specify shipment and destination ports and can negotiate for extended insurance if desired. Blue indicates seller’s, Gold indicates buyer’s and Green indicates mixed or shared transport obligations, costs and risks. (Source: ICC)