Incoterms 2020 Guide
Incoterms define who is responsible for carriage, insurance, duties, and risk at each stage of an international shipment. Here's who pays for what under each of the 11 terms.
| Term | Name | Mode | Main carriage | Insurance | Import duty |
|---|---|---|---|---|---|
| EXW | Ex Works | Any | Buyer | Buyer | Buyer |
| FCA | Free Carrier | Any | Buyer | Buyer | Buyer |
| FAS | Free Alongside Ship | Sea | Buyer | Buyer | Buyer |
| FOB | Free On Board | Sea | Buyer | Buyer | Buyer |
| CFR | Cost and Freight | Sea | Seller | Buyer | Buyer |
| CIF | Cost, Insurance & Freight | Sea | Seller | Seller (min.) | Buyer |
| CPT | Carriage Paid To | Any | Seller | Buyer | Buyer |
| CIP | Carriage & Insurance Paid To | Any | Seller | Seller | Buyer |
| DAP | Delivered At Place | Any | Seller | Seller | Buyer |
| DPU | Delivered At Place Unloaded | Any | Seller | Seller | Buyer |
| DDP | Delivered Duty Paid | Any | Seller | Seller | Seller |
Frequently asked questions
What is the difference between FOB and CIF?
Under FOB the buyer arranges and pays for ocean freight and insurance once goods are loaded; under CIF the seller pays freight and minimum insurance to the destination port, but risk still transfers to the buyer at the origin port.
Which Incoterm puts the most responsibility on the seller?
DDP (Delivered Duty Paid) — the seller handles carriage, insurance, export and import clearance, and pays import duty, delivering the goods ready for unloading at the buyer's location.
Which Incoterm puts the most on the buyer?
EXW (Ex Works) — the buyer takes responsibility from the seller's door, including loading, export clearance, freight, insurance, and import duty.
This is a general reference, not legal or trade advice. Always confirm terms in your sales contract; risk transfer and obligations can be modified by agreement.
Estimates are for planning only. Confirm rates, accessorials, minimums, and service details directly with providers.
What to do next
Once your terms are set, line up a customs broker or freight forwarder to handle clearance, duties, and the legs each party is responsible for.