Incoterms® 2020 advisor. The right rule in a minute.
Incoterms® 2020 are the International Chamber of Commerce's 11 standard trade rules that set who arranges and pays for each step of a shipment and where risk passes from seller to buyer. Answer five questions about your shipment and this advisor recommends the rule that fits, with a full responsibilities chart for all 11.
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Incoterms® rules set who does and pays for each task and where risk passes. They do not cover ownership, payment terms or which law applies, so set those out in your contract.
All 11 rules, who does what
Your recommended rule is highlighted. Scroll the table sideways on small screens.
| Rule | Mode | Export clearance | Loading at origin | Main carriage | Cargo insurance | Risk passes | Unloading at destination | Import clearance and duties |
|---|
* FCA: the seller loads onto the buyer's vehicle when delivery is at the seller's premises; at any other place the seller delivers on its own vehicle, ready for unloading. † CPT, CIP, CFR, CIF: the buyer pays unloading unless the seller's carriage contract includes it. “None” means neither party is obliged to insure; each insures its own risk. Incoterms® is a registered trademark of the International Chamber of Commerce.
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Three steps. One clear answer.
- 01
Choose how the goods travel and who books the main freight.
- 02
Say who clears export and import customs and where risk should pass to the buyer.
- 03
Read the recommended rule, how to write it in your contract, and the seller and buyer tasks for all 11 rules.
Responsibilities follow the ICC's Incoterms® 2020 rules. Seven rules apply to any mode of transport (EXW, FCA, CPT, CIP, DAP, DPU, DDP) and four to sea and inland waterway only (FAS, FOB, CFR, CIF). Under CIP the seller must insure on Institute Cargo Clauses (A); under CIF on at least Clauses (C); both for at least 110% of the contract value. Under DPU the seller unloads at destination; under DDP the seller clears import and pays duties and taxes; under EXW the buyer clears export. FCA allows the parties to agree that the buyer's carrier issues an on-board bill of lading to the seller. Each rule is scored against your answers, and the ICC's guidance to use FCA, CPT or CIP rather than FOB, CFR or CIF for containerised cargo is applied. Incoterms® is a registered trademark of the International Chamber of Commerce.
Results are estimates to support your decisions. For binding figures, ask our team or your customs broker.
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Straight answers.
Anything else, ask us directly. A principal replies, not a bot.
anirudh@sourcesquid.coWhat is the difference between FOB and FCA?
Under FOB the seller delivers when the goods are on board the ship at the port of shipment, and it applies to sea transport only. Under FCA the seller delivers when it hands the goods to the buyer's carrier at a named place, which suits containers and any mode of transport.
Should I use FOB for container shipments?
The ICC recommends FCA instead. Containers are usually handed to the carrier at a terminal days before loading, so under FOB the seller carries risk for goods it no longer controls.
What insurance does CIF include compared with CIP?
Under CIF the seller must buy at least Institute Cargo Clauses (C) cover, a limited set of named risks. Under CIP it must buy Clauses (A), all risks. Both must cover at least 110% of the contract value.
Is DDP a good choice for importers?
DDP is the simplest for the buyer, but the seller must act as importer of record in your country and pay duties and import taxes. Many overseas suppliers cannot do this cleanly, so DAP, where you clear import yourself, is often more practical.
Do Incoterms decide when ownership passes?
No. Incoterms® rules cover delivery, costs and the transfer of risk. Ownership, payment and governing law must be set out in the sales contract.
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