Incoterms 2020
Incoterms 2020 Explained: All 11 Trade Terms
What Incoterms are and how all 11 Incoterms 2020 rules work, including FCA, FOB, CIF, DAP, and DDP: risk transfer, costs, and who does what.
International Commercial Terms defining buyer/seller responsibilities in trade transactions.
Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers for the delivery of goods. They specify who pays for transport, insurance, customs clearance, and when risk transfers. Current Incoterms 2020 include 11 terms like FOB, CIF, EXW, and DDP. Using the correct Incoterm clarifies obligations and prevents disputes.
Incoterms 2020 has 11 rules. Some can be used with any mode of transport, and some only for sea and inland waterway transport.
Rules for any mode of transport
- EXW (Ex Works): Ex Works (EXW) represents the minimum obligation for the seller.
- FCA (Free Carrier): Free Carrier (FCA) means the seller delivers the goods to the carrier or another person nominated by the buyer at the seller's premises or another named place.
- CPT (Carriage Paid To): Carriage Paid To (CPT) means the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place.
- CIP (Carriage and Insurance Paid To): Carriage and Insurance Paid To (CIP) is the same as CPT, but the seller must also contract for insurance against the buyer's risk of loss or damage to the goods during carriage.
- DAP (Delivered at Place): Delivered at Place (DAP) means the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place of destination.
- DPU (Delivered at Place Unloaded): Delivered at Place Unloaded (DPU) replaced DAT (Delivered at Terminal) in Incoterms 2020.
- DDP (Delivered Duty Paid): Delivered Duty Paid (DDP) represents the maximum obligation for the seller.
Rules for sea and inland waterway
- FAS (Free Alongside Ship): Free Alongside Ship (FAS) means the seller delivers when the goods are placed alongside the vessel (on a quay or barge) at the named port of shipment.
- FOB (Free on Board): Free on Board (FOB) is one of the most commonly used Incoterms for sea freight.
- CFR (Cost and Freight): Cost and Freight (CFR) means the seller delivers the goods on board the vessel.
- CIF (Cost, Insurance and Freight): Cost, Insurance and Freight (CIF) is like CFR, but the seller must also contract for insurance against the buyer's risk of loss or damage to the goods during carriage.
Browse all pages (11)
- CFR Incoterm (Cost and Freight) – Meaning, Risk & Costs
- CIF Incoterm (Cost, Insurance and Freight) – Meaning, Risk & Costs
- CIP Incoterm (Carriage and Insurance Paid To) – Meaning, Risk & Costs
- CPT Incoterm (Carriage Paid To) – Meaning, Risk & Costs
- DAP Incoterm (Delivered at Place) – Meaning, Risk & Costs
- DDP Incoterm (Delivered Duty Paid) – Meaning, Risk & Costs
- DPU Incoterm (Delivered at Place Unloaded) – Meaning, Risk & Costs
- EXW Incoterm (Ex Works) – Meaning, Risk & Costs
- FAS Incoterm (Free Alongside Ship) – Meaning, Risk & Costs
- FCA Incoterm (Free Carrier) – Meaning, Risk & Costs
- FOB Incoterm (Free on Board) – Meaning, Risk & Costs
More in this directory
Frequently asked questions
What are Incoterms?
International Commercial Terms defining buyer/seller responsibilities in trade transactions.
How many Incoterms are there?
Incoterms 2020 has 11 rules: EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR, CIF.
Which Incoterms are only for sea freight?
FAS, FOB, CFR, CIF