Quick Reference
Any Mode of Transport
EXW
Ex Works
Seller makes goods available at their premises. Buyer bears all costs and risks from that point.
Any modeFCA
Free Carrier
Seller delivers goods to carrier or named place. Risk transfers when goods are handed to the first carrier.
Any modeCPT
Carriage Paid To
Seller pays freight to named destination. Risk transfers when goods are handed to the first carrier.
Any modeCIP
Carriage and Insurance Paid To
Same as CPT but seller must also arrange insurance to destination.
Any modeDAP
Delivered at Place
Seller delivers goods to named destination, ready for unloading. Buyer handles import clearance and unloading.
Any modeDPU
Delivered at Place Unloaded
Seller delivers and unloads goods at named destination. Only INCOTERM requiring seller to unload.
Any modeDDP
Delivered Duty Paid
Seller bears all costs and risks to destination including import duties. Maximum obligation for seller.
Any modeSea and Inland Waterway Only
FAS
Free Alongside Ship
Seller delivers goods alongside the vessel at the port of shipment. Sea and inland waterway only.
Sea & Inland WaterwayFOB
Free on Board
Seller delivers goods on board the vessel at port of shipment. One of the most commonly used terms.
Sea & Inland WaterwayCFR
Cost and Freight
Seller pays freight to destination port. Risk transfers when goods are loaded on board at port of shipment.
Sea & Inland WaterwayCIF
Cost, Insurance and Freight
Same as CFR but seller must arrange marine insurance. Risk transfers at port of shipment.
Sea & Inland WaterwayINCOTERMS 2020 Comparison Table
| Term | Risk Transfer | Seller Pays Transport? | Seller Pays Insurance? | Seller Handles Import? | Mode |
|---|---|---|---|---|---|
| EXW | Seller's premises | No | No | No | Any |
| FCA | First carrier | No | No | No | Any |
| CPT | First carrier | Yes | No | No | Any |
| CIP | First carrier | Yes | Yes (Clause A) | No | Any |
| DAP | Destination | Yes | No | No | Any |
| DPU | Destination (unloaded) | Yes | No | No | Any |
| DDP | Destination | Yes | Yes | Yes | Any |
| FAS | Alongside ship | No | No | No | Sea & IW |
| FOB | On board vessel | No | No | No | Sea & IW |
| CFR | On board vessel | Yes | No | No | Sea & IW |
| CIF | On board vessel | Yes | Yes (Clause C) | No | Sea & IW |
What Are INCOTERMS?
INCOTERMS (International Commercial Terms) are a set of 11 standardised trade terms published by the International Chamber of Commerce (ICC). They define the responsibilities, costs, and risks between buyers and sellers in international and domestic trade transactions.
The current edition, INCOTERMS 2020, came into effect on 1 January 2020 and replaced the previous 2010 edition. These terms are incorporated into sales contracts worldwide and are recognised by courts and trade authorities in virtually every country.
Each INCOTERM specifies which party (buyer or seller) is responsible for arranging transport, paying freight costs, arranging and paying for insurance, handling export and import customs clearance, and bearing risk during transit. They do not cover transfer of ownership, payment terms, or remedies for breach of contract.
Key Changes in INCOTERMS 2020
- DAT renamed to DPU — Delivered at Terminal (DAT) was renamed to Delivered at Place Unloaded (DPU) to clarify that delivery can occur at any named place, not just a terminal or port.
- CIP insurance upgraded to Clause A — Under CIP, the seller must now arrange all-risks insurance (ICC Clause A) instead of the basic cover (ICC Clause C) required under INCOTERMS 2010. CIF remains at Clause C for sea transport.
- FCA and bills of lading — FCA now includes a provision allowing the buyer to instruct their carrier to issue an on-board bill of lading to the seller, addressing a longstanding problem with letter of credit transactions.
- Security-related obligations — All 11 terms now include explicit allocation of security-related transport obligations, reflecting the increased importance of cargo security in global supply chains.
Frequently Asked Questions
What is the difference between FOB and CIF?
Under FOB (Free on Board), the seller delivers goods on board the vessel at the port of shipment and the buyer arranges and pays for sea freight and insurance. Under CIF (Cost, Insurance and Freight), the seller pays for both the freight and insurance to the destination port. In both cases, risk transfers to the buyer when goods are loaded on board the vessel at the origin port — the key difference is who pays for transport and insurance.
Which INCOTERM should I use for containerised cargo?
The ICC recommends FCA (Free Carrier) instead of FOB for containerised cargo. With containers, the seller typically delivers goods to a container terminal — not directly on board the vessel. FOB technically requires delivery on board the ship, which creates an ambiguity for containers that are loaded by the terminal operator. FCA aligns the risk transfer point with the actual handover at the terminal.
Are INCOTERMS legally binding?
INCOTERMS are not law — they are contractual terms that become binding only when both parties agree to incorporate them into their sales contract. To use them, the contract should reference the specific term and edition (e.g. "FCA [named place] INCOTERMS 2020"). They are widely recognised by courts and arbitration bodies around the world.
What is the difference between CIP and CIF?
CIP (Carriage and Insurance Paid To) applies to any mode of transport, while CIF (Cost, Insurance and Freight) is for sea and inland waterway only. Since INCOTERMS 2020, CIP requires the seller to arrange all-risks insurance (ICC Clause A), whereas CIF only requires basic cover (ICC Clause C). CIP is recommended for multimodal and containerised shipments.
What does DDP mean for VAT and import duties?
Under DDP (Delivered Duty Paid), the seller is responsible for all costs including import customs clearance, duties, and taxes (such as VAT/GST) in the destination country. This means the seller may need to register for VAT in the buyer's country or appoint a fiscal representative. DDP offers maximum convenience for the buyer but places significant obligations on the seller.
Can I use this data via API?
Yes. All 11 INCOTERMS are accessible via our free REST API at
/api/incoterms. No authentication required. Query all terms or look up by code (e.g. /api/incoterms?code=FOB). Full documentation at /api-docs.Building something? Use the API.
GET /api/incoterms?code=FOBINCOTERMS is a registered trademark of the International Chamber of Commerce (ICC). This tool provides general guidance only — always refer to the official ICC publication for contractual purposes.