Official description
The rule with the fewest obligations for the seller, whose only responsibility is to pack the goods and make them available to the buyer at their own premises.
Transfer of risk
Seller's premises, goods made available
INCOTERMS® 2020
The complete guide
The 11 official rules that define the obligations of buyer and seller in international trade, in force since 1 January 2020.
Get a quote
Incoterms® 2020
What Is An Incoterm®?
Incoterms® (International Commercial Terms) are rules published by the International Chamber of Commerce (ICC) defining, for every international transaction, who bears the costs, risks and customs formalities between seller and buyer. The 2020 version has been in force since 1 January 2020 and replaces the 2010 edition. It comprises 11 rules grouped into two families: 7 rules usable for any mode of transport, and 4 rules reserved for sea and inland waterway transport.
Who Pays What, And Who Carries The Risk?
Select a rule: the timeline shows where cost and risk pass from seller to buyer, stage by stage.
Any mode
Sea / inland
FOBFree On Board
Transfer of costs (and risk) occurs as soon as the goods are loaded on board the vessel designated by the buyer, at the agreed port of loading.
CostMain carriage
SellerBuyer
RiskMain carriage
SellerBuyer
Cost Risk Transfer
On board the vessel at the port of loading
Any Mode Of Transport
7 rules applicable regardless of the mode (road, rail, sea, air, multimodal).
Official description
The buyer takes on most of the transport, but is relieved of formalities in the country of export, which fall to the seller.
Transfer of risk
Named place in country of export, goods handed to carrier
Official description
The seller bears the cost of carriage to the named place of destination but is no longer responsible for the goods, which travel at the buyer's risk.
Transfer of risk
Handover to the first carrier (risk passes to buyer)
Official description
The seller bears the cost of carriage to the named place of destination indicated by the Incoterms® rule.
Transfer of risk
Handover to the first carrier (insurance covered by the seller)
Official description
The goods are considered delivered when placed at the buyer's disposal at destination on the arriving means of transport, ready for unloading.
Transfer of risk
Named place of destination, on arriving means of transport, not unloaded
Official description
The goods are considered delivered once unloaded from the means of transport and placed at the buyer's disposal at the agreed place of destination.
Transfer of risk
Named place of destination, after unloading
Official description
The Incoterms® rule that imposes the maximum level of obligation on the seller, who assumes all risks and costs, including import clearance, up to the agreed place.
Transfer of risk
Named place, after import clearance
| Code | Full name | Official description | Transfer of risk |
|---|---|---|---|
| EXW | Ex Works | The rule with the fewest obligations for the seller, whose only responsibility is to pack the goods and make them available to the buyer at their own premises. | Seller's premises, goods made available |
| FCA | Free Carrier | The buyer takes on most of the transport, but is relieved of formalities in the country of export, which fall to the seller. | Named place in country of export, goods handed to carrier |
| CPT | Carriage Paid To | The seller bears the cost of carriage to the named place of destination but is no longer responsible for the goods, which travel at the buyer's risk. | Handover to the first carrier (risk passes to buyer) |
| CIP | Carriage and Insurance Paid to | The seller bears the cost of carriage to the named place of destination indicated by the Incoterms® rule. | Handover to the first carrier (insurance covered by the seller) |
| DAP | Delivered At Place | The goods are considered delivered when placed at the buyer's disposal at destination on the arriving means of transport, ready for unloading. | Named place of destination, on arriving means of transport, not unloaded |
| DPU | Delivered at Place Unloaded | The goods are considered delivered once unloaded from the means of transport and placed at the buyer's disposal at the agreed place of destination. | Named place of destination, after unloading |
| DDP | Delivered Duty Paid | The Incoterms® rule that imposes the maximum level of obligation on the seller, who assumes all risks and costs, including import clearance, up to the agreed place. | Named place, after import clearance |
Sea And Inland Waterway Only
4 rules used exclusively for sea transport and inland waterways.
Official description
Costs (and risk) are transferred to the buyer when the goods are placed alongside the vessel (for example on a quay) at the named port of shipment.
Transfer of risk
Alongside the vessel at the port of shipment
Official description
Transfer of costs (and risk) occurs as soon as the goods are loaded on board the vessel designated by the buyer, at the agreed port of loading.
Transfer of risk
On board the vessel at the port of loading
Official description
Risk is transferred to the buyer at the port of departure when the goods are delivered on board the vessel, while the costs are borne by the seller.
Transfer of risk
On board the vessel at the port of departure (risk to buyer)
Official description
Insurance must cover at minimum the price of the goods plus 10%.
Transfer of risk
On board the vessel at the port of departure (min. value + 10% insurance on seller)
| Code | Full name | Official description | Transfer of risk |
|---|---|---|---|
| FAS | Free Alongside Ship | Costs (and risk) are transferred to the buyer when the goods are placed alongside the vessel (for example on a quay) at the named port of shipment. | Alongside the vessel at the port of shipment |
| FOB | Free On Board | Transfer of costs (and risk) occurs as soon as the goods are loaded on board the vessel designated by the buyer, at the agreed port of loading. | On board the vessel at the port of loading |
| CFR | Cost and Freight | Risk is transferred to the buyer at the port of departure when the goods are delivered on board the vessel, while the costs are borne by the seller. | On board the vessel at the port of departure (risk to buyer) |
| CIF | Cost Insurance and Freight | Insurance must cover at minimum the price of the goods plus 10%. | On board the vessel at the port of departure (min. value + 10% insurance on seller) |
How To Choose The Right Incoterm®?
The choice of Incoterm® depends on the commercial balance of power, each party's ability to handle customs formalities, and the mode of transport used. Some pointers:
First export or import: prefer EXW (purchase) or DDP (sale) to limit operational responsibilities.
Maritime containers: prefer FCA, CPT or CIP rather than FOB, FAS, CFR or CIF — the latter are designed for maritime bulk, not for containers loaded at a terminal.
Logistics cost control: choose an Incoterm® from group C or D to entrust the main carriage to the seller.
Insurance coverage: only CIP and CIF require the seller to take out insurance — for the others, check who insures the goods during transit.
Source
The definitions above are based on the official fact sheet "Incoterms and customs value" published by the French General Directorate of Customs and Indirect Taxation (Direction Générale des Douanes et Droits Indirects).
Frequently Asked Questions
Answers to the most common questions about Incoterms®
What is the difference between FOB and CIF?+
FOB (Free On Board) and CIF (Cost Insurance and Freight) both transfer risk to the buyer as soon as the goods are loaded on board the vessel at the port of loading. The difference lies in costs: under FOB, the buyer pays the maritime freight and insurance; under CIF, the seller pays the freight and takes out the insurance (minimum value of the goods + 10%).
When should EXW be used?+
EXW (Ex Works) imposes the minimum obligations on the seller, who simply packs and makes the goods available at their premises. It suits buyers with in-house logistics able to handle the full transport chain and export formalities. For first export operations, FCA is generally preferable since the seller retains control of the export formalities.
Does DPU replace DAT (Incoterms 2010)?+
Yes. The 2020 version replaced DAT (Delivered at Terminal) with DPU (Delivered at Place Unloaded). The principle is broadened: unloaded delivery can now take place at any agreed location, not only at a terminal.
Which Incoterms® require insurance?+
Only CIP (Carriage and Insurance Paid to) and CIF (Cost Insurance and Freight) require the seller to take out insurance for the main carriage. For CIP, the minimum cover has been extended (Institute Cargo Clauses level A). For CIF, the insurance must cover at minimum the price of the goods plus 10%.
Which Incoterms® should be avoided for container transport?+
FOB, FAS, CFR and CIF were historically designed for bulk maritime transport, where goods are loaded directly on board the vessel. For containers handed over at a port terminal, these rules create a gap between the moment of effective handover (terminal) and the legal transfer of risk (crossing the ship's rail). FCA, CPT and CIP are better suited.
Need Help Picking The Right Incoterm®?
Our freight forwarders help you structure international contracts and optimise your customs costs.
Shipping in containers? See our container types and dimensions to confirm compatibility with your Incoterm®.
