Incoterms® 2020
Current rules, transfer of risk and allocation of responsibility.
Incoterms® 2020
Incoterms are a set of international rules published by the International Chamber of Commerce (ICC) that determine, in a sales contract, how delivery of the goods, costs and risks are shared between seller and buyer.
The edition currently in force is Incoterms® 2020, in use since 1 January 2020. The ICC reviews the rules roughly every ten years. It is best practice to state clearly in contracts which edition is meant ("FCA Istanbul, Incoterms® 2020").
| Rule | Adı | Transport mode | When does risk transfer? | Export clearance | Import clearance | Insurance |
|---|---|---|---|---|---|---|
| EXW | Ex WorksEx works | All modes | At the seller's premises, when the goods are made available to the buyer | The buyer | The buyer | — |
| FCA | Free CarrierFree carrier | All modes | When the goods are handed over to the buyer's carrier at the named place | The seller | The buyer | — |
| CPT | Carriage Paid ToCarriage paid to | All modes | When the goods are handed over to the first carrier | The seller | The buyer | — |
| CIP | Carriage and Insurance Paid ToCarriage and insurance paid to | All modes | When the goods are handed over to the first carrier | The seller | The buyer | Seller · ICC (A) |
| DAP | Delivered At PlaceDelivered at named place | All modes | At the destination, on the vehicle ready for unloading | The seller | The buyer | — |
| DPU | Delivered At Place UnloadedDelivered, unloaded | All modes | At the destination, when the goods are unloaded from the vehicle | The seller | The buyer | — |
| DDP | Delivered Duty PaidDelivered, duties paid | All modes | At the destination, on the vehicle ready for unloading | The seller | The seller | — |
| FAS | Free Alongside ShipFree alongside ship | Sea / inland waterway | When the goods are delivered alongside the ship (on the quay) | The seller | The buyer | — |
| FOB | Free On BoardFree on board | Sea / inland waterway | When the goods are loaded on board the vessel | The seller | The buyer | — |
| CFR | Cost and FreightCost and freight | Sea / inland waterway | When the goods are loaded on board the vessel | The seller | The buyer | — |
| CIF | Cost, Insurance and FreightCost, insurance and freight | Sea / inland waterway | When the goods are loaded on board the vessel | The seller | The buyer | Seller · ICC (C) |
The table is a summary; for the full scope of rights and obligations, see the ICC's official text and your contract terms. The value in the "Insurance" column shows the minimum insurance obligation the rule places on the seller.
How are the rules grouped?
Rules for all modes
EXW, FCA, CPT, CIP, DAP, DPU and DDP can be used for road, air, rail, sea and intermodal transport.
Sea and inland waterway only
FAS, FOB, CFR and CIF are used only for sea transport. For container transport, FCA, CPT or CIP is usually preferred.
What changed in the 2020 edition?
- DPU instead of DAT: The "Delivered At Terminal" rule was renamed "Delivered at Place Unloaded (DPU)" because the place of destination does not have to be a terminal.
- Wider insurance under CIP: Under the CIP rule, the minimum insurance the seller must provide was raised to ICC (A) "all risks" cover. Under CIF, ICC (C) remains the minimum level.
- FCA and the bill of lading: If buyer and seller agree, it became possible under FCA to have a bill of lading with an "on board" notation issued after loading.
- Delivery with own transport: Under FCA, DAP, DPU and DDP, carriage can be performed by the seller's or buyer's own vehicle instead of a third party.
- Security obligations: Obligations relating to transport security are now regulated more clearly in each rule.
Which rule should I choose?
If you are an exporter, you can consider EXW/FCA to limit cost and responsibility, or DAP/DPU/DDP if you want to keep control of the goods until arrival. If you are an importer, FCA/FOB may suit you if you want to manage transport with your own network, and DAP/DDP if you want to leave responsibility to the seller. It helps to decide according to the product, route, insurance and your customs capability, and, if needed, together with your logistics partner.
Frequently asked questions
What are Incoterms?
Rules published by the International Chamber of Commerce (ICC) that determine, in a sales contract, how delivery of the goods and costs and risks are shared between seller and buyer.
Which is the current Incoterms edition?
Incoterms® 2020 has been in force since 1 January 2020 and is the current edition.
What is the difference between EXW and DDP?
Under EXW the seller's responsibility is minimal; the goods are made available at the seller's premises. Under DDP the seller carries the goods to the destination and bears all costs, including import duties.
What is the difference between FOB and CIF?
Both are used only for sea transport. Under FOB, freight is for the buyer; under CIF, the seller pays freight and minimum insurance. Under both, risk passes to the buyer when the goods are loaded on board.
Which rule should be chosen for container transport?
For container and multimodal transport, rules suitable for all modes, such as FCA, CPT or CIP, are generally recommended.