What types of Incoterms are there? Everything you need to know

Definition of Incoterms: standardised rules established by the International Chamber of Commerce that set out the responsibilities of the buyer and seller in international trade

Incoterms 2020 are in force

.- Incoterms for any mode of transport: sea, land, air or multimodal

EXW (Ex Works) The buyer assumes almost all responsibility. The seller delivers the goods to the buyer’s premises

FCA (Free Carrier) The seller delivers the goods to a carrier designated by the buyer. The seller handles export clearance

CPT (Carriage Paid to) The seller pays for transport to the destination. Risk is transferred earlier, upon handover to the carrier

CIP (Carriage and Insurance Paid to). This is the same as CPT but also includes more comprehensive insurance

DAP (Delivered at Place). The seller delivers to the destination, ready for unloading. The importer pays for import duties and unloading

DPU (Delivered at Place Unloaded). The seller delivers and also unloads the goods.

DDP (Delivered Duty Paid). The seller bears all costs and risks, including customs duties. The seller bears full responsibility

- Incoterms for sea freight only

FAC (Free Alongside Ship). The seller delivers the goods at the port and the buyer takes responsibility for them from that point

FOC (Free On Board). The seller loads the goods onto the ship and the buyer assumes the risk once the goods are on board

CFR (Cost and Freight). The seller pays for sea freight and the risk passes to the buyer upon loading

CIF (Cost, Insurance and Freight). Same as CFR but the seller pays for insurance

Group                                    Who bears greater responsibility

EXW                                      Buyer

F (FCA, FAS, FOB)               Shared (early delivery)

C (CPT, CIP, CFR, CIF)        Seller pays for transport, buyer assumes risk