Incoterms® 2020 Guide
Who pays freight, insurance and customs — and when risk transfers — under each Incoterm.
Incoterms® rules, published by the International Chamber of Commerce (ICC), define who arranges and pays for transport, insurance and customs — and the exact point where risk passes from seller to buyer. The current version is Incoterms® 2020.
| Term | Full name | Mode | Risk passes to buyer | Main freight | Insurance | Export clearance | Import clearance & duty |
|---|---|---|---|---|---|---|---|
| EXW | Ex Works | Any | At seller's premises, not loaded | Buyer | Buyer | Buyer | Buyer |
| FCA | Free Carrier | Any | Handed to buyer's carrier at named place | Buyer | Buyer | Seller | Buyer |
| CPT | Carriage Paid To | Any | Handed to first carrier | Seller | Buyer | Seller | Buyer |
| CIP | Carriage & Insurance Paid To | Any | Handed to first carrier | Seller | Seller (all-risks cover) | Seller | Buyer |
| DAP | Delivered at Place | Any | At named destination, ready for unloading | Seller | — | Seller | Buyer |
| DPU | Delivered at Place Unloaded | Any | Unloaded at named destination | Seller | — | Seller | Buyer |
| DDP | Delivered Duty Paid | Any | At named destination, ready for unloading | Seller | — | Seller | Seller |
| FAS | Free Alongside Ship | Sea / inland waterway | Alongside the vessel at loading port | Buyer | Buyer | Seller | Buyer |
| FOB | Free On Board | Sea / inland waterway | On board the vessel at loading port | Buyer | Buyer | Seller | Buyer |
| CFR | Cost and Freight | Sea / inland waterway | On board the vessel at loading port | Seller | Buyer | Seller | Buyer |
| CIF | Cost, Insurance & Freight | Sea / inland waterway | On board the vessel at loading port | Seller | Seller (minimum cover) | Seller | Buyer |
Key points
- DPU replaced the old DAT (Delivered at Terminal) in Incoterms 2020.
- FOB, CFR and CIF are meant for sea cargo loaded on board. For containers handed over at a CFS/ICD, FCA, CPT and CIP are usually more appropriate.
- Under CIP the seller must buy all-risks (ICC A) insurance; under CIF minimum (ICC C) cover is enough unless agreed otherwise.
- Always write the Incoterm with a named place and the version, e.g. “FOB Chennai Port, Incoterms® 2020”.
Not sure which term to agree with your buyer or supplier? Ask our team — we'll explain the cost and risk for each option.
Incoterms® is a registered trademark of the International Chamber of Commerce. This page is a simplified guide.
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