Incoterms 2020 cost and risk chart
“S” means the seller pays, “B” the buyer. The risk point is where the risk of loss or damage passes from seller to buyer; for C rules, cost and risk transfer at different places.
| Cost item | EXW | FCA | CPT | CIP | DAP | DPU | DDP | FAS | FOB | CFR | CIF |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Export packing and marking | S | S | S | S | S | S | S | S | S | S | S |
| Loading at seller premises | B | S | S | S | S | S | S | S | S | S | S |
| Export clearance | B | S | S | S | S | S | S | S | S | S | S |
| Transport to port or delivery place | B | S | S | S | S | S | S | S | S | S | S |
| Origin terminal charges and loading on board | B | B | S | S | S | S | S | B | S | S | S |
| Main carriage (sea, air, road) | B | B | S | S | S | S | S | B | B | S | S |
| Cargo insurance | B | B | B | S | S | S | S | B | B | B | S |
| Destination terminal charges | B | B | B | B | S | S | S | B | B | B | B |
| Transport from port to named place | B | B | S | S | S | S | S | B | B | B | B |
| Unloading at the named place | B | B | B | B | B | S | B | B | B | B | B |
| Import clearance | B | B | B | B | B | B | S | B | B | B | B |
| Import duties and VAT | B | B | B | B | B | B | S | B | B | B | B |
| Transport mode | Any | Any | Any | Any | Any | Any | Any | Sea | Sea | Sea | Sea |
Where risk transfers under each rule
- EXW Ex Works
Risk passes: When goods are placed at the buyer's disposal at the seller's premises, not loaded
The buyer does almost everything, even export clearance and loading. Unsuitable when the buyer cannot clear exports; FCA is usually better for cross-border sales.
- FCA Free Carrier
Risk passes: When goods are handed to the buyer's carrier at the named place
Works for containers and any mode; the recommended alternative to FOB for container cargo. Since 2020 the parties can agree that the buyer's carrier issues an on-board bill of lading to the seller.
- CPT Carriage Paid To
Risk passes: When goods are handed to the first carrier, not on arrival
The seller pays carriage to the named destination, but risk passes at origin: cost and risk transfer at different points. Destination charges in the seller's contract of carriage are the seller's.
- CIP Carriage and Insurance Paid To
Risk passes: When goods are handed to the first carrier
As CPT plus insurance by the seller. Incoterms 2020 requires the broadest cover, Institute Cargo Clauses (A), for at least 110% of the contract value.
- DAP Delivered at Place
Risk passes: When goods arrive at the named place, ready for unloading on the arriving vehicle
The seller carries all risk to the destination; the buyer unloads, clears imports and pays duties. Insurance is not required, but as the seller bears the risk it usually insures.
- DPU Delivered at Place Unloaded
Risk passes: Once goods are unloaded at the named place
Renamed from DAT in 2020; the only rule that requires the seller to unload at destination. The seller must be sure it can unload at the named place.
- DDP Delivered Duty Paid
Risk passes: When goods arrive at the named place, cleared for import and ready for unloading
The seller does the most, including import clearance, duties and VAT. The seller must be able to clear imports in the buyer's country; check whether VAT can be recovered.
- FAS Free Alongside Ship
Risk passes: When goods are placed alongside the buyer's vessel at the port of shipment
Sea and inland waterway only; common for bulk and heavy cargo, not for containers.
- FOB Free On Board
Risk passes: When goods are on board at the port of shipment
Sea and inland waterway only. Container cargo is handed over at the terminal before loading, so the ICC recommends FCA for containers.
- CFR Cost and Freight
Risk passes: When goods are on board at the port of shipment, not on arrival
The seller pays freight to the destination port, but risk passes when loaded at origin. CPT is recommended for containers.
- CIF Cost, Insurance and Freight
Risk passes: When goods are on board at the port of shipment
As CFR plus insurance by the seller, but only minimum cover, Institute Cargo Clauses (C), for at least 110% is required. Agree ICC (A) in the contract for broader cover. CIP is recommended for containers.
Frequently asked questions
What is the difference between FOB and CIF?
Under both, risk passes to the buyer once goods are on board at the port of shipment. The difference is cost: under FOB the buyer books and pays the freight and insurance; under CIF the seller pays freight to the destination port and buys insurance (minimum ICC (C), 110%).
Why are FOB, CFR and CIF not recommended for containers?
Containers are handed to the carrier at the terminal yard, yet the seller would carry risk until loading, a period it no longer controls. The ICC recommends FCA, CPT and CIP instead.
What changed in Incoterms 2020 from 2010?
DAT became DPU; CIP now requires ICC (A) cover; FCA can provide for an on-board bill of lading; parties may use their own transport; security-related costs are allocated more clearly.
Do Incoterms cover ownership and payment?
No. Incoterms allocate delivery, costs, risk and customs duties only. Transfer of title, payment, remedies and governing law belong in the sales contract.
How should I write an Incoterm in a contract?
Write the rule, a precise place and the version, e.g. “FCA Shenzhen Yantian CY, Incoterms® 2020” or “DAP 12 Example Street, Hamburg, Incoterms® 2020”. The more precise the place, the fewer disputes.