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Incoterms Guide
Incoterms 2020 — who pays for transport, insurance, and where risk transfers.
EXW Ex Works +
- Seller risk
- Minimal
- Buyer risk
- Maximum
- Transport
- Buyer
- Insurance
- Buyer
- Best for
- Buyer controls entire logistics chain
FCA Free Carrier +
- Seller risk
- Until handed to carrier
- Buyer risk
- Main carriage onward
- Transport
- Buyer (main)
- Insurance
- Buyer
- Best for
- Multimodal — seller delivers to carrier
FOB Free On Board +
- Seller risk
- Until loaded on board at port
- Buyer risk
- Sea transit onward
- Transport
- Buyer (sea)
- Insurance
- Buyer
- Best for
- Ocean export — classic seller port loading
CFR Cost and Freight +
- Seller risk
- Until destination port
- Buyer risk
- Unloading + import
- Transport
- Seller (sea)
- Insurance
- Buyer
- Best for
- Seller pays freight, buyer insures
CIF Cost Insurance Freight +
- Seller risk
- Until destination port
- Buyer risk
- Unloading + import
- Transport
- Seller
- Insurance
- Seller (minimum)
- Best for
- Seller arranges freight + basic insurance
CIP Carriage Insurance Paid +
- Seller risk
- Until named place
- Buyer risk
- Import clearance
- Transport
- Seller
- Insurance
- Seller (higher cover)
- Best for
- Multimodal equivalent of CIF
DAP Delivered at Place +
- Seller risk
- Until destination
- Buyer risk
- Import duties
- Transport
- Seller
- Insurance
- Seller
- Best for
- Door delivery, buyer handles import
DPU Delivered at Place Unloaded +
- Seller risk
- Until unloaded
- Buyer risk
- Import duties
- Transport
- Seller
- Insurance
- Seller
- Best for
- Seller unloads at destination terminal
DDP Delivered Duty Paid +
- Seller risk
- Maximum
- Buyer risk
- Minimal
- Transport
- Seller
- Insurance
- Seller
- Best for
- Seller handles everything including import duty