Free Logistics Tools

Incoterms® Selection Assistant 2020

Narrow the rules for verification based on the planned responsibilities of the parties for transportation, risk, insurance, unloading and import.

← Return to all tools

Planned distribution of responsibilities

How do you want to allocate the main freight and transport risk? The buyer arranges the main transportation; the seller transfers the goods at the point of departure The seller pays the main freight; risk passes upon transfer to the carrier/ship at the point of departure The seller bears the risk to destination

Transport model Auto, air, railway, multimodal or container transportation Sea/inland waters only; handover at or on board a ship in port

Incoterms® 2020

Brief map of 11 rules

Any type of transport

EXW

Ex Works

The seller provides the goods at the agreed location; Extensive loading, export and transportation responsibilities may remain with the buyer.

FCA

Free Carrier

The seller formalizes the export and transfers the goods to the buyer's carrier at the agreed location.

CPT

Carriage Paid To

The seller pays for carriage to the named place, but the risk passes when the goods are handed over to the first carrier.

CIP

Carriage and Insurance Paid To

In addition to the CPT distribution, the seller arranges cargo insurance for the buyer's benefit.

DAP

Delivered at Place

The seller delivers the goods to the destination on arriving transport ready for unloading; Import and unloading are usually on the buyer.

DPU

Delivered at Place Unloaded

The seller delivers and unloads the goods at the named place; Import clearance is carried out by the buyer.

DDP

Delivered Duty Paid

The seller provides the goods at the destination after import clearance and payment of duties; his responsibilities are the most extensive.

Sea and inland waterways only

FAS

Free Alongside Ship

The seller delivers the goods alongside the ship at the named port of departure.

FOB

Free on Board

The seller delivers the goods on board the vessel at the named port of departure.

CFR

Cost and Freight

The seller pays sea freight to the port of destination and the risk passes on board at the port of departure.

CIF

Cost, Insurance and Freight

In addition to the CFR distribution, the seller will arrange marine insurance for the benefit of the buyer.

How to compare Incoterms 2020 in practice

The International Chamber of Commerce (ICC) publishes these rules to allocate delivery obligations between buyer and seller. After using the selector, check the suggested rule against the actual handover point and sales contract.

What changed from Incoterms 2010?

DAT (Delivered at Terminal) became DPU (Delivered at Place Unloaded). The new name makes clear that unloaded delivery can take place at an agreed location beyond a terminal. DAP leaves the goods ready for unloading; DPU includes unloading by the seller.

CIP and CIF have different default insurance cover. Under Incoterms 2020, CIP calls for Institute Cargo Clauses (A) or similar cover. CIF retains Clauses (C) as its default. Parties can agree other cover. Check exclusions and deductibles when comparing policies.

Rule explanation — ICC: What changed from Incoterms 2010?

ICC Academy — What changed from Incoterms 2010?

Paying for transport is different from carrying the risk

With CPT or CIP, the seller pays for carriage to the named destination. Risk normally passes when the goods reach the first carrier. With CFR or CIF, risk passes on board the vessel at the port of shipment. Record the cost endpoint and risk transfer point separately.

A quote that includes transport to Baku does not by itself leave all transit risk with the seller. Agree who handles a damage claim, what cover is in place and which handover records to keep.

Rule explanation — ICC: Paying for transport is different from carrying the risk

FCA or FOB for a container shipment?

FAS, FOB, CFR and CIF apply to sea and inland waterway transport. EXW, FCA, CPT, CIP, DAP, DPU and DDP cover any mode or combination of modes. Consider FCA when the container is handed to a carrier at a terminal before vessel loading.

FCA 2020 also provides an agreed option for the buyer to instruct the carrier to issue an on-board bill of lading to the seller. Check the practical arrangement with the carrier and bank.

Rule explanation — ICC: FCA or FOB for a container shipment?

ICC Academy — FCA or FOB for a container shipment?

Five checks before requesting a quote

Write the rule, the precise named place and the version: Incoterms 2020. Check that both parties mean the same handover point.

Confirm who arranges loading equipment, who unloads and who handles export and import clearance. Before choosing DDP, check that the seller can fulfil the import obligations in the destination country.

List the costs included in the quote. Does it cover collection, main transport, terminal handling and warehouse delivery? Record the responsible contact for each stage. The rule alone does not identify the people who will carry out the work.

Prepare a freight request with your delivery term

FAQ

Questions about choosing Incoterms®

Does Incoterms® define a transfer of ownership?

No. The rules mainly describe responsibilities, costs and risks; ownership and payment terms are separately stated in the contract.

Do CIF and CIP require the same coverage?

No. In Incoterms® 2020, the standard level of coverage for CIP is wider than for CIF; Please check your policy for actual coverage.

Is it enough to enter only three letters?

No. The exact place or port, edition of the rules and the necessary additional terms of the contract should be indicated.

Request a quote

Need an accurate plan for your shipment?

Send the prepared cargo data to our team for a checked route plan and commercial proposal.