Incoterms
Rules defining delivery terms and distribution of responsibilities in international trade.
Delivery Rules in International Trade
The Incoterms® rules define at which point the responsibilities for delivery, carriage, risk and cost pass between the seller and the buyer in international trade.
- 11
- Delivery Rules
- 7
- For Any Mode of Transport
- 4
- For Sea and Inland Waterway
Rules for Any Mode or Modes of Transport
These rules may be used for road, air or sea carriage, including multimodal shipments in which more than one mode of transport is combined.
EXW
Ex Works
Delivery at the Seller’s Premises
The seller places the goods at the buyer’s disposal at the named place. Carriage and most of the subsequent steps are the buyer’s responsibility.
FCA
Free Carrier
Delivery to the Buyer’s Carrier
The seller delivers the goods to the carrier or another party nominated by the buyer, at the named place of delivery.
CPT
Carriage Paid To
Carriage Paid to the Named Destination
The seller pays for carriage to the agreed destination; risk, however, passes to the buyer once the goods are handed over to the carrier.
CIP
Carriage and Insurance Paid To
Carriage and Insurance Paid to the Named Destination
In addition to CPT, the seller also arranges insurance for the carriage.
DAP
Delivered at Place
Delivery at the Named Place
The seller places the goods at the buyer’s disposal at the named destination, ready for unloading.
DPU
Delivered at Place Unloaded
Delivery Unloaded at the Named Place
The seller brings the goods to the named destination and also carries out the unloading.
DDP
Delivered Duty Paid
Delivery with Import Duties Paid
The rule under which the seller’s responsibility is greatest. All obligations up to delivery, including import formalities and duties, rest with the seller.
These seven rules may be used for road, air or sea carriage, including multimodal shipments in which more than one mode of transport is used.
Rules for Sea and Inland Waterway Transport
FAS
Free Alongside Ship
Delivery Alongside the Vessel
The seller delivers the goods by placing them alongside the vessel at the named port of shipment.
FOB
Free On Board
Delivery on Board the Vessel
The seller loads the goods on board the vessel at the named port of shipment. Risk passes to the buyer once the goods are on board.
CFR
Cost and Freight
Cost and Main Carriage Paid
The seller pays the freight to the port of destination; risk, however, passes to the buyer once the goods are on board the vessel.
CIF
Cost, Insurance and Freight
Cost, Insurance and Main Carriage Paid
In addition to CFR, the seller provides insurance for the carriage. Risk passes to the buyer once the goods are on board the vessel.
Insurance Cover
Under Incoterms® 2020, CIP generally calls for a wider level of insurance cover, whereas CIF is based on a more limited minimum level. The parties may agree a different level of cover in their contract.
The Incoterms® rules govern delivery, risk, costs and certain obligations of the parties. They do not replace all the terms of the contract of sale.