Incoterms® 2020 Guide

The 11 trade terms that decide who pays for transport, who carries the risk and who clears customs — explained in plain language.

How to use Incoterms®

An Incoterms® rule only works with a named place and the version. It decides where the goods are delivered, where risk passes and who pays which costs — it does not decide when ownership passes or how the price is paid; that belongs in the sales contract.

Example: FCA Klaipėda Container Terminal, Lithuania, Incoterms® 2020

Any mode of transport

Seven rules that work for road, rail, air, sea and multimodal — including containers.

EXWEx WorksThe seller makes the goods available at its own premises or another named place — not loaded and not cleared for export. The buyer does everything else.FCAFree CarrierThe seller clears the goods for export and hands them to the carrier nominated by the buyer at a named place — its own premises or a terminal, warehouse or airport.CPTCarriage Paid ToThe seller pays the carriage to the named destination, but the risk passes to the buyer as soon as the goods are handed to the first carrier.CIPCarriage and Insurance Paid ToAs CPT, plus the seller insures the goods to the named destination — under Incoterms® 2020 with all-risks cover.DAPDelivered at PlaceThe seller delivers the goods to the named destination, on the arriving vehicle and ready for unloading. The buyer unloads and clears import.DPUDelivered at Place UnloadedThe seller delivers to the named destination and unloads the goods there. The only Incoterms® rule where the seller unloads at destination. Replaced DAT in 2020.DDPDelivered Duty PaidThe seller delivers to the named destination, cleared for import with duties and taxes paid, ready for unloading. Maximum obligation for the seller.

Sea and inland waterway only

Four rules for cargo loaded directly onto the ship — bulk and breakbulk. For containers, use FCA, CPT or CIP instead.

FASFree Alongside ShipThe seller places the goods alongside the buyer's vessel — on the quay or a barge — at the named port of shipment, cleared for export.FOBFree On BoardThe seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, cleared for export. The buyer pays the sea freight.CFRCost and FreightThe seller pays the sea freight to the named port of destination, but the risk passes to the buyer once the goods are on board at the port of shipment.CIFCost, Insurance and FreightAs CFR, plus the seller insures the goods to the port of destination — with minimum cover unless agreed otherwise.

Who does what

Rule	Transport	Export clearance	Main carriage	Insurance	Import clearance	Risk passes
EXW	Any mode	Buyer	Buyer	Not required	Buyer	Seller's premises, goods made available
FCA	Any mode	Seller	Buyer	Not required	Buyer	Handed to the buyer's carrier
CPT	Any mode	Seller	Seller	Not required	Buyer	Handed to the first carrier
CIP	Any mode	Seller	Seller	Seller — all risks	Buyer	Handed to the first carrier
DAP	Any mode	Seller	Seller	Not required	Buyer	At destination, ready for unloading
DPU	Any mode	Seller	Seller	Not required	Buyer	At destination, unloaded
DDP	Any mode	Seller	Seller	Not required	Seller	At destination, import-cleared
FAS	Sea only	Seller	Buyer	Not required	Buyer	Alongside the ship, port of loading
FOB	Sea only	Seller	Buyer	Not required	Buyer	On board, port of loading
CFR	Sea only	Seller	Seller	Not required	Buyer	On board, port of loading
CIF	Sea only	Seller	Seller	Seller — minimum	Buyer	On board, port of loading

Incoterms® is a registered trademark of the International Chamber of Commerce. This guide is Cargo 4S's own summary for everyday use; for the complete rules see the official ICC Incoterms® 2020 publication.

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