Incoterms 2020 — Who Pays, Who Bears the Risk
Eleven rules decide where the seller’s responsibility ends and the buyer’s begins. Pick a rule to see the whole journey stage by stage, or read the chart below to compare all eleven at once.
Any mode of transport
EXW
Ex WorksThe buyer collects the goods from the seller’s door and carries every cost and risk from there.
Risk passes: At the buyer’s disposalFCA
Free CarrierThe seller hands the export-cleared goods to a carrier the buyer names, and is done.
Risk passes: Handover to the carrierCPT
Carriage Paid ToThe seller pays the carriage to the named destination; risk passes at the very first carrier.
Risk passes: Handover to the first carrierCIP
Carriage and Insurance Paid ToCPT plus all-risks cover: the seller pays the carriage and insures the whole journey.
Risk passes: Handover to the first carrierDAP
Delivered at PlaceThe seller delivers to the buyer’s named place, ready for unloading; the buyer clears import and unloads.
Risk passes: Arrival at destinationDPU
Delivered at Place UnloadedThe only rule where the seller must unload the goods at the destination.
Risk passes: Unloaded at destinationDDP
Delivered Duty PaidThe seller delivers to the buyer’s door with import duty and taxes already paid.
Risk passes: Arrival at destinationSea and inland waterway only
FAS
Free Alongside ShipThe seller places the goods on the quay alongside the vessel; the buyer lifts them aboard.
Risk passes: Alongside the vesselFOB
Free On BoardThe seller loads the goods on board the vessel; from that point the buyer pays and carries the risk.
Risk passes: On board the vesselCFR
Cost and FreightThe seller pays the freight to the destination port — but risk already passed when the goods were loaded.
Risk passes: On board the vesselCIF
Cost, Insurance and FreightCFR plus a cargo policy: the seller pays the freight and insures the voyage for the buyer.
Risk passes: On board the vesselWho pays what
A tinted cell is a stage the seller pays for, a plain one is the buyer’s, and “per contract” means the rule leaves it to the named place or the contract of carriage. The thick line under a cell is where risk passes to the buyer.
| Stage | EXW | FCA | FAS | FOB | CFR | CIF | CPT | CIP | DAP | DPU | DDP |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Packing the goods for export | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Loading onto the collecting vehicle | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Inland carriage to the port or terminal | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Export customs formalities | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Terminal handling at origin | Buyer | Per contract | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Loading onto the main carrier | Buyer | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| The international freight | Buyer | Buyer | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| Terminal handling at destination | Buyer | Buyer | Buyer | Buyer | Per contract | Per contract | Per contract | Per contract | Seller | Seller | Seller |
| Import customs, duty and taxes | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller |
| Inland carriage to the final destination | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller | Seller | Seller |
| Unloading at the final destination | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller | Buyer |
| Cargo insurance | — | — | — | — | — | Clauses (C) | — | Clauses (A) | — | — | — |
Two cells are left at “per contract” on purpose: terminal handling at origin under FCA follows wherever the named place is, and terminal handling at destination under CFR, CIF, CPT and CIP is decided by the carriage contract the seller signed. Agree both in writing.
Incoterms® is a registered trademark of the International Chamber of Commerce. This reference is a plain-language summary of the eleven rules, not the rules themselves — the authoritative text is ICC publication no. 723E.
Sources
Every payer cell on these pages was checked against several published references, and the two cells those references disagree on are drawn as “per contract” rather than resolved by picking a side. This is a summary for orientation, not legal advice — the contract and the ICC text govern.
-
Incoterms® 2020
International Chamber of Commerce
The rules themselves. The authoritative text is ICC publication no. 723E, which is not free — this page is a summary of it, not a copy.
-
Incoterms
Wikipedia
Risk transfer point, export and import clearance and the insurance clauses for each of the eleven rules; the 2010 to 2020 changes; what the rules do not cover.
Incoterms 2020 FAQ
Incoterms are eleven three-letter rules published by the International Chamber of Commerce that say, for a sale of goods, exactly where the seller’s job ends and the buyer’s begins. They settle three things: who arranges and pays for each leg of the transport, who clears customs at each border, and — the one that costs the most when it is misread — at what precise moment the risk of loss or damage passes from one side to the other. The 2020 edition has been in force since 1 January 2020.
More than people expect. They do not transfer ownership, do not set the price or the payment terms, do not say what happens if one side breaches the contract, and do not choose the governing law or the forum. A sales contract still has to do all of that. An Incoterm is one clause in it, not a substitute for it.
Not always — and that is the single most useful thing to know about the eleven rules. Under the four C-rules (CFR, CIF, CPT, CIP) the seller pays for carriage long past the point where risk has already passed to the buyer. Under CPT the goods can be at the buyer’s risk from the moment a truck leaves the seller’s yard, while the seller keeps paying freight to the other side of the world. The chart on this page marks both points.
FCA, CPT or CIP — never FOB, CFR or CIF. Those three are sea rules written around the moment cargo is lifted on board, and a container is handed in at a terminal days earlier. Sold FOB, the seller keeps the risk through a wait it can no longer control, and cannot even get the on-board bill of lading until the ship loads. FCA is the rule the ICC wrote for that handover.
Only two rules require it: CIF, where the seller must cover at least Institute Cargo Clauses (C), and CIP, where the 2020 edition raised the requirement to the all-risks Clauses (A). Under the other nine rules nobody is obliged to insure anything, which does not mean nobody should — whoever bears the risk for a leg is the one exposed on it.
It decides who holds the transport document, and that is what a lookup needs. Whoever contracted the carriage holds the bill of lading or air waybill — the seller under the C and D rules, the buyer under E and F. Once you have the number, the container tracking app and the air cargo tracker return the same milestones to either side, and the API reference makes the same lookup one REST call.