Understanding Incoterms® 2020
Navigate international trade with confidence. Learn about the standardized terms that define responsibilities, costs, and risks in global shipping contracts.
Essential Terms for Global Trade
Incoterms® rules are the world's essential terms of trade for the sale of goods. Whether you are filing a purchase order, packaging and labeling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms® rules are there to guide you.
Maritime Transport
Understanding sea freight terms
Land Transport
Terms for road and rail shipping
Cargo Handling
Loading and unloading terms
Cost Allocation
Understanding payment responsibilities
Incoterms® 2020EXW
Ex WorksThe seller makes the goods available at their premises. The buyer bears all costs and risks involved in taking the goods to their final destination.
Seller's Responsibilities
- •Make goods available at seller's premises
- •Provide proof that goods have been delivered
- •Help with export clearance documentation (if requested)
Buyer's Responsibilities
- •Pay all transportation costs
- •Handle export and import clearance
- •Bear all risks from seller's premises to final destination
Incoterms® 2020FOB
Free on BoardThe seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. The seller must clear the goods for export.
Seller's Responsibilities
- •Deliver goods on board vessel
- •Clear goods for export
- •Pay costs until goods are loaded
Buyer's Responsibilities
- •Choose and book vessel
- •Pay freight and import costs
- •Bear all risks once goods are on board
Incoterms® 2020CIF
Cost, Insurance and FreightThe seller delivers the goods on board the vessel and pays costs and freight to bring the goods to the named port of destination. The seller also contracts for insurance cover.
Seller's Responsibilities
- •Deliver goods on board vessel
- •Pay freight to destination
- •Arrange and pay for insurance
- •Clear goods for export
Buyer's Responsibilities
- •Bear risks once goods are loaded
- •Handle import clearance
- •Pay import duties and taxes
Incoterms® 2020DDP
Delivered Duty PaidThe seller delivers the goods when they are placed at the disposal of the buyer, cleared for import, and not unloaded from any arriving means of transport at the named place of destination.
Seller's Responsibilities
- •Pay all costs to destination
- •Clear goods for export and import
- •Pay duties and taxes
- •Bear all risks to destination
Buyer's Responsibilities
- •Take delivery at named place
- •Unload goods at destination
Important Note
The Incoterms® rules are protected by copyright owned by ICC. The above information is a brief overview and should not be used as a definitive guide. For detailed information, please consult the official ICC Incoterms® 2020 publication.
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