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ICC Incoterms® 2020Free5 languages
11Incoterms® 2020
Incoterms 2020 – trade terms made simple
Who bears which costs, who carries the risk, who clears customs? The 11 internationally recognised ICC trade terms – explained clearly, interactively, with the right suggestion for your case.
Quick answer
Incoterms® 2020 are 11 standardised rules from the International Chamber of Commerce (ICC). In the sales contract they define which costs and risks the seller and buyer each bear during transport – and at which point responsibility passes. They do not govern transfer of ownership.
Guided assistant
Which trade term fits my situation?
Answer 3–4 short questions — we recommend the right ICC Incoterm® 2020 for you.
Step 1 of 3
What is your role in the deal?
Incoterms are always defined from the seller's perspective — your role determines what you must watch out for.
Or fine-tune directly
Interactive
The Incoterm Finder
Slide the faders to your scenario — we suggest the matching trade term in real time.
How far does the seller carry the cost of the journey?
Buyer pays everythingSeller pays everything
From when does the buyer carry the risk of loss?
very early (at factory)very late (at buyer)
SellerBuyer
Matching trade term
FCA
Free Carrier
All transport modesWhy this one?
Seller clears export and hands over to the buyer’s carrier. The clean choice for containers.
Also fits
Basics in 60 seconds
What is a trade term?
An Incoterm is a short clause in the sales contract between seller and buyer. It answers three questions: Who organises and pays for transport? Who bears the risk if goods are damaged or lost in transit? And who handles export and import customs? Instead of negotiating every detail, a code such as “FOB Hamburg Incoterms® 2020" says it all.
Important: Incoterms govern cost and risk – but not the transfer of ownership and not payment. Those are agreed separately in the sales contract.
Always from the seller’s point of view
The most common beginner mistake: Incoterms are always read from the seller’s (shipper’s) perspective. “Free" means: up to this point it is free for the buyer – because the seller pays and carries that far. The further “right" the term sits, the more the seller takes on.
Mnemonic: like a postage stamp
Think of “prepaid postage": whoever stamps a letter has paid the postage in advance – the recipient gets it “free to the door". Incoterms work the same way: “Free Carrier", “Free On Board", “Carriage Paid" describe how far the seller has prepaid – i.e. pays and carries.
Risk ≠ cost – the costliest myth
Under the C-terms (e.g. CFR, CIF, CPT, CIP) the seller pays freight to the destination, but risk passes to the buyer much earlier – often at loading. If something breaks in transit, the buyer bears the loss even though the seller paid the freight. Cargo insurance must therefore always follow the risk point, not the cost point.
Incoterms® 2020 – the explainer video
The 4 groups at a glance
E
Departure
The buyer collects the goods at the seller’s premises. Minimum obligation for the seller (EXW only).
F
Main carriage unpaid
The seller delivers to the carrier or vessel; the buyer pays the main carriage (FCA, FAS, FOB).
C
Main carriage paid
The seller pays freight to the destination – but risk passes early (CPT, CIP, CFR, CIF).
D
Arrival
The seller bears cost and risk all the way to the destination (DAP, DPU, DDP).
All 11 Incoterms 2020
Pick a trade term for the full explanation with obligations, risk and cost transfer, documents and common mistakes.
Group E – Departure
Group F – Main carriage unpaid
Group C – Main carriage paid
CPTMulti
Carriage Paid To
Seller pays freight to destination — but risk passes already at the first carrier.
CIPMulti
Carriage & Insurance Paid
Like CPT, plus the seller arranges comprehensive all-risk insurance (ICC A).
CFRSea
Cost and Freight
Seller pays ocean freight to the destination port — but risk passes on board.
CIFSea
Cost, Insurance & Freight
Like CFR, plus minimum insurance (ICC C) arranged by the seller.
Group D – Arrival
DAPMulti
Delivered at Place
Seller delivers to the destination, ready for unloading. Buyer handles import clearance.
DPUMulti
Delivered at Place Unloaded
The only Incoterm where the seller also unloads at destination.
DDPMulti
Delivered Duty Paid
Maximum duty: seller delivers to the door, including import duties and taxes.
Cost & risk side by side
Frequently asked questions about Incoterms
What are Incoterms 2020?
Incoterms® 2020 are 11 international trade terms by the ICC defining which costs and risks the seller and buyer each bear in transport: EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAP, DPU and DDP.
Do Incoterms govern transfer of ownership?
No. Incoterms govern only cost and risk transfer, not the transfer of title and not payment terms. Those must be agreed separately in the sales contract.
Why are Incoterms read from the seller’s perspective?
Because the term describes how far the seller (shipper) carries cost and risk. “Free" means free for the buyer up to that point – much like a prepaid, stamped letter.
What is the difference between FOB and FCA?
FOB is sea freight only – risk passes when goods are on board. FCA works for all modes – risk passes at handover to the first carrier. For containers the ICC recommends FCA over FOB.
What does it mean that risk and cost split?
Under the C-terms the seller pays freight to the destination, but risk passes at loading. Damage in transit then hits the buyer financially – so insurance is crucial.
Which Incoterms suit containers?
For containers and multimodal transport, FCA, CPT and CIP are suitable. The sea-only terms FAS, FOB, CFR and CIF are less suitable for containers.
Which Incoterm should I choose as a buyer or seller?
As a seller you decide how far you want to carry costs and risk: EXW for minimal effort, DDP for maximum customer convenience. As a buyer you often prefer D-terms (DAP, DDP) because the seller handles everything to your door – but watch import customs: under DAP you are responsible, under DDP the seller covers it. Use our guided assistant above for a step-by-step recommendation.
Next steps
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