Incoterms® are rules published by the International Chamber of Commerce (ICC) that define, in an international sale, who is responsible for each stage of transport, who pays which costs and at what point the risk over the goods passes from seller to buyer. The current version is Incoterms® 2020.
Incoterms do not deal with transfer of ownership, payment terms or taxes — those are defined in the sales contract.
Rules for any mode of transport
EXW · Ex Works
The seller makes the goods available at its premises; the buyer takes on virtually everything else.
FCA · Free Carrier
The seller delivers the goods, cleared for export, to the carrier nominated by the buyer.
CPT · Carriage Paid To
The seller pays carriage to the destination; risk passes to the buyer upon delivery to the first carrier.
CIP · Carriage and Insurance Paid To
As CPT, but the seller also buys insurance with broad cover (Institute Cargo Clauses A).
DAP · Delivered at Place
The seller delivers the goods at the named destination, ready for unloading.
DPU · Delivered at Place Unloaded
The seller delivers the goods unloaded at the named destination.
DDP · Delivered Duty Paid
The seller delivers at destination with import duties paid — the seller's maximum obligation.
| Rule | Name | In short |
|---|---|---|
| EXW | Ex Works | The seller makes the goods available at its premises; the buyer takes on virtually everything else. |
| FCA | Free Carrier | The seller delivers the goods, cleared for export, to the carrier nominated by the buyer. |
| CPT | Carriage Paid To | The seller pays carriage to the destination; risk passes to the buyer upon delivery to the first carrier. |
| CIP | Carriage and Insurance Paid To | As CPT, but the seller also buys insurance with broad cover (Institute Cargo Clauses A). |
| DAP | Delivered at Place | The seller delivers the goods at the named destination, ready for unloading. |
| DPU | Delivered at Place Unloaded | The seller delivers the goods unloaded at the named destination. |
| DDP | Delivered Duty Paid | The seller delivers at destination with import duties paid — the seller's maximum obligation. |
Rules for sea and inland waterway transport only
FAS · Free Alongside Ship
The seller delivers the goods alongside the vessel at the port of shipment.
FOB · Free On Board
The seller delivers the goods on board the vessel; from then on, costs and risks belong to the buyer.
CFR · Cost and Freight
The seller pays freight to the destination port; risk passes to the buyer once the goods are on board at origin.
CIF · Cost, Insurance and Freight
As CFR, but the seller also buys insurance with minimum cover (Institute Cargo Clauses C).
| Rule | Name | In short |
|---|---|---|
| FAS | Free Alongside Ship | The seller delivers the goods alongside the vessel at the port of shipment. |
| FOB | Free On Board | The seller delivers the goods on board the vessel; from then on, costs and risks belong to the buyer. |
| CFR | Cost and Freight | The seller pays freight to the destination port; risk passes to the buyer once the goods are on board at origin. |
| CIF | Cost, Insurance and Freight | As CFR, but the seller also buys insurance with minimum cover (Institute Cargo Clauses C). |
How to choose an Incoterm
- Consider which party is better placed to negotiate freight and insurance.
- Consider the mode: FAS, FOB, CFR and CIF are for sea transport. For containerized cargo, the ICC recommends considering FCA, CPT and CIP.
- Name the delivery place precisely — e.g. “FCA Port of Santos, terminal X”.
- Keep the Incoterm consistent with the payment terms and the contract.
When requesting a quote, tell us the agreed Incoterm. If it is not defined yet, our team can help you assess the alternatives for your operation.
Incoterms® is a registered trademark of the International Chamber of Commerce.
