Incoterms are standardized trade terms published by the International Chamber of Commerce that define who is responsible for shipping, insurance, customs, and risk in an international sale. The 2020 edition has 11 rules and is the current version.

What is the difference between risk transfer and cost transfer?

Risk transfer is the point where loss or damage becomes the buyer's problem; cost transfer is who pays for each leg of carriage. In CIF, for example, risk passes when goods are loaded but the seller still pays freight to the destination port.

Which Incoterms work for any transport mode?

Seven rules — EXW, FCA, CPT, CIP, DAP, DPU, and DDP — work for any mode including air, road, rail, and multimodal. The other four — FAS, FOB, CFR, and CIF — are for sea and inland waterway transport only.

Which term puts the most responsibility on the seller?

DDP (Delivered Duty Paid) places maximum obligation on the seller, who handles everything including import customs and duty at the destination. EXW (Ex Works) is the opposite, with the buyer responsible from the seller's premises onward.

Why did FOB get misused for containers?

FOB, CFR, and CIF were written for goods passed over a ship's rail and are meant for bulk cargo. For containers handed to a carrier at a terminal, the ICC recommends FCA, CPT, or CIP, because risk should pass at the terminal, not at the ship.

What is the Incoterms 2020 Reference?

Complete Incoterms 2020 reference showing buyer and seller obligations, where risk transfers, who pays freight and insurance, and which transport modes apply for each of the 11 rules. Pick a rule to see the full breakdown. It runs free in your browser on Gera Tools, with nothing uploaded.

Incoterms 2020 Reference

Name: Incoterms 2020 Reference
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

Incoterms 2020 are the 11 standard trade terms that define who does what in an international sale — who arranges carriage, who insures, who clears customs, and crucially where risk passes from seller to buyer. This tool shows the full profile of each rule.

How it works

Each Incoterm sets a single named place and a point along the journey where risk transfers, plus who bears each cost:

EXW — buyer collects from the seller’s premises; seller does the least.
FCA / FAS / FOB — seller delivers to a carrier, ship’s side, or on board.
CFR / CIF / CPT / CIP — seller pays carriage (and, for CIF/CIP, insurance) to the destination, but risk still passes earlier at shipment.
DAP / DPU / DDP — seller delivers at the destination; DDP also pays import duty.

Note the split in the C-terms: the seller pays freight to the destination but risk transfers at the origin when goods are handed over — a common source of disputes.

Tips and examples

Use the multimodal group (FCA, CPT, CIP, DAP, DPU, DDP) for containerised or air freight; reserve FAS, FOB, CFR, CIF for bulk sea cargo.
2020 raised the required insurance cover under CIP to Institute Cargo Clauses (A), while CIF stayed at the minimum (C).
Always name the precise place after the term, e.g. FCA Shanghai Port or DDP 10 High St, London — the term alone is incomplete.

The 2020 changes worth knowing

Incoterms 2020 (the current edition) made three practical changes from 2010:

FCA now allows a bill of lading. Under FCA the seller delivers to a carrier at origin, but banks financing the transaction with a letter of credit historically needed an on-board bill of lading, which FCA could not produce. Incoterms 2020 lets the parties agree in the sale contract that the buyer will instruct their carrier to issue an on-board B/L to the seller.
CIP raised to ICC(A) insurance. CIP now requires the seller to obtain “all risks” cover under Institute Cargo Clauses (A), which is the highest level of cargo insurance. CIF — more commonly used for commodity bulk trades — stayed at the lower minimum cover under ICC(C).
DPU replaced DAT. The old “Delivered at Terminal” became “Delivered at Place Unloaded”, widening the delivery point from a specific terminal to any agreed named place. The seller bears risk until the goods are unloaded at destination.

Choosing the right term for your shipment

The right Incoterm depends on three questions: how much logistical control does your team have at origin and destination, what is the cargo type, and how does your trade finance arrangement work?

Situation	Recommended term
Buyer handles everything; seller just packages	EXW
Container, buyer appoints carrier at origin	FCA
Bulk sea cargo, seller to port; buyer arranges main leg	FOB
Seller pays ocean freight but risk transfers at loading	CIF or CFR
Seller delivers door-to-door, buyer clears customs	DAP
Seller handles everything including import duty	DDP

EXW pitfall. EXW looks attractive to sellers but places import export obligations on the buyer at the seller’s premises. In practice this creates customs problems because the buyer often cannot legally act as exporter in the seller’s country. FCA at the seller’s premises is almost always the better choice.

DDP pitfall. DDP is convenient for buyers but requires the seller to clear import customs in the buyer’s country, which means the seller needs a customs registration or local agent there. Sellers who agree to DDP without checking this in advance regularly face delays and fines.

Quick obligation summary

Term	Who books freight	Who insures	Where risk transfers
EXW	Buyer	Buyer	Seller’s premises
FCA	Buyer	Buyer	Named handover point
FOB	Buyer	Buyer	Loaded on vessel
CFR	Seller	Buyer	Loaded on vessel
CIF	Seller	Seller (min.)	Loaded on vessel
CIP	Seller	Seller (all risks)	Handover to carrier
CPT	Seller	Buyer	Handover to carrier
DAP	Seller	Seller	Ready to unload at destination
DPU	Seller	Seller	Unloaded at destination
DDP	Seller	Seller	Duty-paid at destination