Incoterms® 2020 Explained
The 11 international trade terms that define who is responsible for cost, risk, insurance and customs at each stage between seller and buyer. Tap a term to see the split, or scan the full table below.
New to the terms? Browse the full trade glossary →
Any transport mode
Sea / inland waterway only
Seller loads the goods on board the vessel at the origin port — the classic term.
⚑ Risk transfers
Once the goods are on board the vessel at the origin port.
Seller's cost extends to
Loaded on board at the origin port.
Insurance
Export customs
Import customs + duties
Unloading at destination
All 11 terms — at a glance
| Term | Mode | Risk passes | Insurance | Export | Import + duties | Unloads |
|---|---|---|---|---|---|---|
| EXW | Any | At the seller's premises, when goods are placed at the buyer's disposal (not loaded). | Buyer | Buyer | Buyer | Buyer |
| FCA | Any | When goods are handed to the buyer's carrier at the named place. | Buyer | Seller | Buyer | Buyer |
| FAS | Sea | Alongside the vessel at the port of shipment. | Buyer | Seller | Buyer | Buyer |
| FOB | Sea | Once the goods are on board the vessel at the origin port. | Buyer | Seller | Buyer | Buyer |
| CFR | Sea | On board the vessel at the origin port (before the main carriage). | Buyer | Seller | Buyer | Buyer |
| CIF | Sea | On board the vessel at the origin port. | Seller | Seller | Buyer | Buyer |
| CPT | Any | When goods are handed to the first carrier (origin). | Buyer | Seller | Buyer | Buyer |
| CIP | Any | When goods are handed to the first carrier (origin). | Seller | Seller | Buyer | Buyer |
| DAP | Any | At the named destination, on the arriving vehicle ready for unloading. | Buyer | Seller | Buyer | Buyer |
| DPU | Any | At the named destination, once the goods are unloaded. | Buyer | Seller | Buyer | Seller |
| DDP | Any | At the named destination, ready for unloading. | Buyer | Seller | Seller | Buyer |
Incoterms® 2020 is a standard of the International Chamber of Commerce (ICC). This is a plain-language summary for quick reference — the named place/port and contract wording always govern. ⚠️ For CFR/CIF/CPT/CIP, the seller pays carriage onward but risk passes back at origin — the most common source of disputes.
Incoterms 2020 — frequently asked questions
- What is Incoterms 2020?
- Incoterms® 2020 are the eleven standardized international trade terms published by the International Chamber of Commerce (ICC). Each term defines who is responsible for cost, risk, insurance and customs at every stage of a shipment between seller and buyer.
- What is the difference between FOB and CIF?
- Under FOB (Free On Board) the seller's cost and risk end once the goods are loaded onto the vessel, and the buyer arranges freight and insurance. Under CIF (Cost, Insurance and Freight) the seller pays freight and minimum insurance to the destination port — but the risk still transfers to the buyer at loading, not on arrival.
- Who pays customs duty under DDP?
- Under DDP (Delivered Duty Paid) the seller bears all costs and risks, including export and import customs clearance, duties and taxes, and delivers the goods cleared for import at the buyer's named destination. It is the maximum obligation for the seller.
- Which Incoterms are for sea freight only?
- FAS, FOB, CFR and CIF apply to sea and inland-waterway transport only. The other seven — EXW, FCA, CPT, CIP, DAP, DPU and DDP — work for any mode of transport, including containers, road, rail and air.