The ICC's Incoterms® 2020 rules split cost, risk and customs duties between seller and buyer in 11 standard ways — seven for any mode of transport, four for sea and inland waterway only. Compare them all, then let the guided selector suggest a fit.
By Amit Jain · with Vinod Kumar Jain · All Frontier Global · free, no login
| Rule | Mode | Main carriage arranged & paid by | Insurance obligation | Export clearance | Import clearance | Risk passes to buyer |
|---|---|---|---|---|---|---|
| EXW Ex Works | Any | Buyer | None obliged | Buyer (seller assists) | Buyer | When goods are placed at buyer's disposal at seller's premises — not loaded |
| FCA Free Carrier | Any | Buyer | None obliged | Seller | Buyer | When goods are handed to the buyer's nominated carrier (loaded on the collecting vehicle if at seller's premises) |
| FAS Free Alongside Ship | Sea / inland waterway | Buyer | None obliged | Seller | Buyer | When goods are placed alongside the vessel at the named port of shipment |
| FOB Free On Board | Sea / inland waterway | Buyer | None obliged | Seller | Buyer | When goods are on board the vessel at the named port of shipment |
| CFR Cost and Freight | Sea / inland waterway | Seller (to destination port) | None obliged | Seller | Buyer | On board the vessel at the shipment port — before the carriage the seller pays for |
| CIF Cost, Insurance and Freight | Sea / inland waterway | Seller (to destination port) | Seller insures — minimum Institute Cargo Clauses (C) | Seller | Buyer | On board the vessel at the shipment port |
| CPT Carriage Paid To | Any | Seller (to named destination) | None obliged | Seller | Buyer | When goods are handed to the first carrier |
| CIP Carriage and Insurance Paid To | Any | Seller (to named destination) | Seller insures — Institute Cargo Clauses (A) all-risks, unless otherwise agreed | Seller | Buyer | When goods are handed to the first carrier |
| DAP Delivered at Place | Any | Seller | None obliged | Seller | Buyer | At the named destination, on the arriving transport ready for unloading |
| DPU Delivered at Place Unloaded | Any | Seller | None obliged | Seller | Buyer | At the named destination, once unloaded — the only rule where the seller must unload |
| DDP Delivered Duty Paid | Any | Seller | None obliged | Seller | Seller (incl. duties & taxes) | At the named destination, ready for unloading — maximum seller obligation |
Under the C-rules the seller pays for carriage (CIF/CIP also insurance) but risk still passes at origin — the classic C-rule trap. For containerised sea freight handed over at a terminal, ICC guidance is to use FCA/CPT/CIP rather than FOB/CFR/CIF. "Incoterms" is a registered trademark of the International Chamber of Commerce; the official ICC texts govern.