International trade reference

Incoterms® 2020

Incoterms® rules are eleven standard trade terms published by the International Chamber of Commerce (ICC). They help buyers and sellers define delivery obligations, allocation of costs and the point at which risk transfers for the sale of goods.

Use the current rule precisely

State the chosen three-letter rule, the exact named place or port and the version in the sales contract—for example: “FCA Guarulhos Airport cargo terminal, Incoterms® 2020”. The named place is commercially important and should not be left vague.

What the rules cover

Delivery point and transfer of risk
Transport and insurance responsibilities
Export and import clearance obligations
Allocation of specified transport-related costs

What they do not replace

Price and payment terms
Transfer of ownership or title
Product specifications or remedies for breach
Governing law, sanctions or force-majeure clauses

Incoterms® 2020

Rules for any mode or combination of transport

EXW

Ex Works

Seller’s delivery obligation: Makes the goods available at the named place, normally the seller’s premises, without loading or export clearance.
Risk transfers: When the goods are placed at the buyer’s disposal at the named place.

FCA

Free Carrier

Seller’s delivery obligation: Clears the goods for export and delivers them to the buyer’s nominated carrier at the named place.
Risk transfers: When delivery to the nominated carrier is completed at the named place.

CPT

Carriage Paid To

Seller’s delivery obligation: Delivers to the carrier and pays carriage to the named destination.
Risk transfers: When the goods are handed to the first carrier—not when they reach the destination.

CIP

Carriage and Insurance Paid To

Seller’s delivery obligation: Performs CPT obligations and obtains the higher level of cargo insurance required by Incoterms® 2020.
Risk transfers: When the goods are handed to the first carrier.

DAP

Delivered at Place

Seller’s delivery obligation: Brings the goods to the named destination, ready for unloading; the buyer handles unloading and import clearance.
Risk transfers: When the goods are placed at the buyer’s disposal, ready for unloading.

DPU

Delivered at Place Unloaded

Seller’s delivery obligation: Brings and unloads the goods at the named destination; the buyer handles import clearance.
Risk transfers: After the goods have been unloaded at the named destination.

DDP

Delivered Duty Paid

Seller’s delivery obligation: Handles transport and export/import formalities and duties, delivering ready for unloading at destination.
Risk transfers: When the cleared goods are placed at the buyer’s disposal, ready for unloading.

Incoterms® 2020

Rules only for sea and inland waterway transport

FAS

Free Alongside Ship

Seller’s delivery obligation: Clears for export and places the goods alongside the buyer’s nominated vessel at the named shipment port.
Risk transfers: When the goods are alongside the vessel.

FOB

Free on Board

Seller’s delivery obligation: Clears for export and places the goods on board the buyer’s nominated vessel.
Risk transfers: When the goods are on board the vessel at the shipment port.

CFR

Cost and Freight

Seller’s delivery obligation: Places the goods on board and pays freight to the named destination port; insurance is the buyer’s responsibility.
Risk transfers: When the goods are on board at the shipment port, despite the seller paying destination freight.

CIF

Cost, Insurance and Freight

Seller’s delivery obligation: Performs CFR obligations and obtains the minimum cargo insurance specified by the rule.
Risk transfers: When the goods are on board at the shipment port.

Operational note for shipments involving Brazil

The chosen rule must work alongside Brazilian customs, tax, foreign-exchange and importer-of-record requirements. DDP can be impractical where a foreign seller cannot lawfully act as importer or satisfy local tax obligations. For containerised cargo delivered to a terminal before vessel loading, FCA is generally more appropriate than FOB. Confirm the structure with the importer, customs broker and freight forwarder before contracting.

Important

This page is a general freight reference, not legal, tax or customs advice. The sales contract and the official ICC Incoterms® 2020 publication control. Confirm the selected rule, named place and local regulatory requirements with qualified advisers.

Official ICC Incoterms® resources →