Reference Guide

Incoterms 2020

Incoterms are a set of three-letter standard trade terms most commonly used in international contracts for the sale of goods. They define who is responsible for shipping costs, risk and insurance at each stage of a shipment.

EXWFCA CPTCIP DATDAP DDPFAS FOBCFR CIF
Any Mode of Transport Rules for any or multiple transport modes — road, air, sea, rail or multimodal
EXW
Ex Works
The seller makes the goods available at their premises. The buyer bears all costs and risks from that point forward.
Maximum responsibility for the buyer. Seller only needs to make goods available — packaging and loading at buyer's risk.
Any Transport
FCA
Free Carrier
The seller delivers goods to a named carrier or other nominated party at the seller's premises or another named place.
Risk transfers when goods are handed to the carrier. May be used whatever mode of transport will be used.
Any Transport
CPT
Carriage Paid To
The seller pays for carriage to the named destination. Risk transfers to buyer when goods are handed to the first carrier.
Seller arranges and pays for transport but risk passes at origin. Insurance is at buyer's discretion.
Any Transport
CIP
Carriage & Insurance Paid
Same as CPT but seller also arranges and pays for cargo insurance during carriage to the named destination.
Incoterms 2020 requires all-risk insurance (Institute Cargo Clauses A) for CIP. Higher cover than CIF.
Any Transport
DAP
Delivered at Place
Seller delivers goods when placed at the disposal of the buyer on the arriving means of transport at the named place.
Seller bears all costs and risks to destination (except import duties). Buyer responsible for unloading.
Any Transport
DAT
Delivered at Terminal
Seller delivers once goods are unloaded at a terminal — quay, warehouse, container yard or road/rail/air cargo terminal.
Seller bears all risks up to and including unloading at the named terminal. Import duties for buyer.
Any Transport
DDP
Delivered Duty Paid
Maximum seller obligation. Seller delivers goods cleared for import and ready for unloading at the named destination.
Seller bears all costs, risks and duties including import clearance. The reverse of EXW — maximum responsibility for seller.
Any Transport
Sea & Inland Waterway Only Rules to be used exclusively when transport is by sea or inland waterway
FAS
Free Alongside Ship
Seller delivers when goods are placed alongside the nominated vessel at the port of shipment.
Risk transfers once goods are placed alongside the ship. All costs and risk from that point belong to buyer. Export clearance is seller's responsibility.
Sea Only
FOB
Free on Board
Seller delivers goods on board the vessel nominated by the buyer at the port of shipment, or provides goods already so delivered.
One of the most widely used Incoterms. Incoterms 2020 clarified that FOB is inappropriate for container shipments — FCA is preferred.
Sea Only
CFR
Cost & Freight
Seller must arrange and pay for transport to the port of destination. Risk transfers when goods are on board the vessel at origin.
Cost and risk split at different points — seller pays freight but risk transfers at loading port. Insurance is buyer's responsibility.
Sea Only
CIF
Cost, Insurance & Freight
Same as CFR but seller also contracts and pays for cargo insurance against buyer's risk during carriage to the port of destination.
Incoterms 2020 requires minimum insurance cover (Institute Cargo Clauses C). Widely used in commodity trade and bulk cargo.
Sea Only
Quick Reference

Cost & Risk Responsibility

Incoterm Export Customs Origin Freight Main Freight Insurance Dest. Freight Import Customs
EXW
FCA
CPT
CIP
DAP
DAT
DDP
FAS
FOB
CFR
CIF
Seller's responsibility Buyer's responsibility

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