Incoterms® 2020 ✓

Incoterms® (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC). They define how costs, risks, and responsibilities are allocated between seller and buyer under an international sales contract.

This page is a practical, operations-focused reference for day-to-day logistics use and does not replace contractual language or legal advice.

For authoritative definitions and interpretations, always refer to the official ICC Incoterms® rules.

Official ICC reference: ICC Incoterms® | Purchase official publication

EXW – Ex Works

The seller makes the goods available at their premises or another named place. The buyer assumes all costs, risks, and operational responsibility from that point onward. EXW places maximum burden on the buyer and is often unsuitable for international exports.

FCA – Free Carrier

The seller delivers the goods to a carrier or another party nominated by the buyer. Risk transfers once the goods are handed over, but cost and responsibility may diverge depending on the location. FCA is widely used for containerized shipments.

FAS – Free Alongside Ship

The seller places the goods alongside the vessel at the named port of shipment. Risk transfers before loading onto the vessel. FAS is used primarily for bulk and breakbulk cargo.

FOB – Free On Board

The seller loads the goods onto the vessel at the port of shipment. Risk transfers once the goods are on board. FOB is commonly misused for containerized cargo.

CFR – Cost and Freight

The seller pays for carriage to the destination port, but risk transfers once the goods are on board at origin. Insurance is the buyer’s responsibility. CFR is sea-only.

CIF – Cost, Insurance and Freight

Similar to CFR, but the seller also provides insurance meeting minimum ICC requirements. Risk still transfers at origin, not destination. CIF is often misunderstood as “delivered” pricing.

CPT – Carriage Paid To

The seller pays carriage to a named place, but risk transfers upon handover to the first carrier. CPT applies to all modes of transport. Insurance remains the buyer’s responsibility.

CIP – Carriage and Insurance Paid To

CIP mirrors CPT but includes seller-provided insurance at a higher coverage level. Risk transfers early, while cost extends further. Frequently misunderstood in multimodal moves.

DAP – Delivered At Place

The seller delivers goods ready for unloading at a named destination. Risk transfers at arrival, but import clearance remains the buyer’s responsibility. DAP is common in project cargo.

DPU – Delivered at Place Unloaded

The seller delivers and unloads the goods at a named place. This is the only Incoterm requiring seller unloading. Site capability must be carefully assessed.

DDP – Delivered Duty Paid

The seller assumes maximum responsibility, including import clearance and duties. Risk transfers at final delivery. DDP exposes sellers to regulatory and tax risk in foreign jurisdictions.

Common Incoterms® Mistakes