Incoterms® 2020
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EXW
Ex WorksBuyer picks up at factory. Maximum obligation on the buyer. Seller not required to load.
Pro Tip: Risky for cross-border. Buyer must handle export clearance, often requiring a local agent.
FCA
Free CarrierSeller clears export customs and delivers to carrier. Good for containerized goods.
Pro Tip: The modern alternative to FOB. Best choice for air freight or multi-modal transport.
FAS
Free Alongside ShipSeller places goods alongside the ship (quay). Buyer loads onto ship.
Pro Tip: Rarely used for container shipping. Mostly for bulk cargo (grain, coal, oil).
FOB
Free on BoardSeller loads goods on the ship. Risk transfers once cargo is "on board".
Pro Tip: Most common for sea freight, but risk sits with seller until goods cross the ship's rail.
CPT
Carriage Paid ToSeller pays freight to destination. Risk transfers when handed to the FIRST carrier.
Pro Tip: Risk transfers BEFORE the goods arrive. Buyer should ensure they have insurance.
CFR
Cost and FreightSeller pays sea freight to port. Risk transfers on board. No insurance included.
Pro Tip: Buyer takes the risk during transit but doesn't control the logistics provider.
CIF
Cost, Insurance & FreightSame as CFR + Seller buys insurance (Clause C minimum coverage).
Pro Tip: Seller only pays for minimum insurance. Buyer should check coverage levels carefully.
CIP
Carriage & Insurance PaidSame as CPT + Seller buys insurance (Clause A "All Risk" coverage).
Pro Tip: New in 2020: Seller must provide 'All Risk' insurance coverage, better than CIF.
DAP
Delivered at PlaceSeller delivers to doorstep, ready for unloading. Buyer pays import tax.
Pro Tip: Very customer-friendly. Seller controls the chain until destination, but Buyer clears customs.
DPU
Delivered at Place UnloadedUnique: The ONLY rule where Seller must unload the goods at destination.
Pro Tip: Seller must have equipment to unload at the destination. Good for large machinery.
DDP
Delivered Duty PaidSeller does everything: Transport, Insurance, and Import Taxes/Duty.
Pro Tip: Maximum service. Seller must be registered to pay taxes in the destination country.