Incoterms Guide

Incoterms® 2020 Guide

Incoterms® define how costs, responsibilities, and risks are divided between buyers and sellers in international trade. Choosing the right term helps both parties understand who handles transportation, customs, insurance, and delivery at each stage of the shipment.

EXW — Ex Works

The seller makes the goods available at their premises. The buyer handles almost everything from pickup to final delivery.

FCA — Free Carrier

The seller delivers the goods, cleared for export, to the buyer’s nominated carrier or agreed location.

FAS — Free Alongside Ship

The seller delivers the goods alongside the vessel at the port of shipment. From there, the buyer takes responsibility.

FOB — Free On Board

The seller delivers and loads the goods on board the vessel. Risk transfers once the goods are on the ship.

CFR — Cost and Freight

The seller pays freight to the destination port, while risk transfers to the buyer once the goods are loaded on board.

CIF — Cost, Insurance and Freight

Similar to CFR, but the seller also provides marine insurance for the shipment.

CPT — Carriage Paid To

The seller pays transportation to the agreed destination, while risk transfers when the goods are handed to the first carrier.

CIP — Carriage and Insurance Paid To

The seller pays transportation and insurance to the named destination, while risk transfers at the first carrier.

DAP — Delivered at Place

The seller delivers the goods to the agreed destination ready for unloading. The buyer handles import clearance and unloading.

DPU — Delivered at Place Unloaded

The seller delivers and unloads the goods at the agreed destination. Import clearance remains the buyer’s responsibility.

DDP — Delivered Duty Paid

The seller handles almost the entire journey, including transport, export and import clearance, duties, and delivery.