Understanding Global Trade Terms
Mastering Incoterms® 2020
Navigate the complexities of international shipping with ease. Our guide to Incoterms® 2020 provides clarity on the roles and responsibilities of buyers and sellers in global trade.
Comprehensive Guide
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Incoterms® 2020 Overview
For Any Mode of Transport:
- EXW (Ex Works): Seller makes goods available at their premises. The buyer bears all risks and costs from that point.
- FCA (Free Carrier): Seller delivers goods, cleared for export, to a carrier nominated by the buyer at a named place.
- CPT (Carriage Paid To): Seller pays for carriage to the named destination, but risk transfers to the buyer upon handover to the first carrier.
- CIP (Carriage and Insurance Paid To): Seller pays for carriage and insurance to the named destination. Risk transfers to the buyer upon handover to the first carrier.
- DAP (Delivered at Place): Seller delivers goods, ready for unloading, at the named destination place. The seller bears all risks involved in bringing the goods to the named place.
- DPU (Delivered at Place Unloaded): Seller delivers and unloads the goods at the named destination place. The seller bears all risks and costs of transport and unloading.
- DDP (Delivered Duty Paid): Seller is responsible for delivering the goods to the named place, cleared for import, with all duties and taxes paid. Maximum obligation for the seller.
For Sea and Inland Waterway Transport:
- FAS (Free Alongside Ship): Seller delivers the goods alongside the vessel at the named port of shipment. The buyer bears all costs and risks from that moment on.
- FOB (Free on Board): Seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Risk transfers once the goods are on board.
- CFR (Cost and Freight): Seller pays for the carriage of the goods to the named port of destination. Risk transfers to the buyer once the goods are on board the ship.
- CIF (Cost, Insurance, and Freight): Same as CFR, but the seller must also obtain minimum insurance coverage for the goods during transit.
For Any Mode of Transport
EXW (Ex Works)
FCA (Free Carrier)
CPT (Carriage Paid To)
For Any Mode of Transport
CIP (Carriage and Insurance Paid To)
DAP (Delivered at Place)
DPU (Delivered at Place Unloaded)
For Any Mode of Transport
DDP (Delivered Duty Paid)
For Sea and Inland Waterway Transport
FAS (Free Alongside Ship)
For Sea and Inland Waterway Transport
FOB (Free on Board)
CFR (Cost and Freight)
CIF (Cost, Insurance, and Freight)
Disclaimer
Consult with Experts
This guide is intended for informational purposes only. The selection of the appropriate Incoterm depends on the specifics of your sales contract and shipment. We strongly recommend consulting with our experts to ensure compliance and optimize your logistics strategy.
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