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Incoterms 2020 Explained
Pick a term and see who handles export, freight, insurance and import — and exactly where the risk passes from seller to buyer. All 11 rules, in plain English.
About Incoterms 2020
- What are Incoterms?
- Incoterms® (International Commercial Terms) are the ICC’s standard three-letter trade terms that define who is responsible for carriage, insurance, export and import clearance, and exactly where the risk and cost pass from seller to buyer. The current set is Incoterms 2020.
- What is the difference between CPT and CIP?
- Both mean the seller pays carriage to the destination and risk passes when the goods are handed to the first carrier. The difference is insurance: under CIP the seller must buy all-risk cargo insurance for the buyer; under CPT no insurance is required.
- Should I use FOB or FCA for containers?
- FCA. FOB is a sea term where risk passes once goods are on board the vessel — which doesn’t fit containers handed over at a terminal days earlier. For containerised cargo, FCA at the terminal is the correct modern choice.
- Which Incoterm means the seller pays import duty?
- DDP (Delivered Duty Paid). It is the maximum seller obligation: the seller delivers to the destination, cleared for import with duties and taxes paid.
- Are these the current rules?
- Yes — Incoterms 2020, published by the International Chamber of Commerce. This page is a plain-English summary for planning; the contract of sale governs, and you should agree the exact Incoterm and named place with your counterpart.