Incoterms 2020
All eleven delivery terms: where risk changes hands, and who pays the freight and the customs.
The Eleven Delivery Terms
ICC Incoterms® 2020.
Risk passes to the buyerAt the seller’s factory or warehouse, once the goods are placed at the buyer’s disposal
Insurance Not compulsory — in practice the buyer arranges it
When the buyer has its own transport network. Least responsibility for the seller, most work for the buyer.
Risk passes to the buyerOn handing the goods to the buyer’s carrier at the named place
Insurance Not compulsory — the buyer arranges it
The correct term recommended instead of FOB for container cargo; export clearance stays with the seller.
Risk passes to the buyerWhen the goods are placed alongside the ship at the port of loading
Insurance Not compulsory — the buyer arranges it
For bulk and project cargo; not used for containers.
Risk passes to the buyerWhen the goods are loaded on board at the port of loading
Insurance Not compulsory — the buyer arranges it
The classic term for bulk and break-bulk cargo. For containers, FCA is more accurate.
Risk passes to the buyerWhen the goods are loaded on board — the cost stays with the seller to the destination port, but risk passes early
Insurance Not compulsory — the buyer, who carries the risk, should arrange it
When the seller can book freight more cheaply. This is where risk and cost part ways.
Risk passes to the buyerWhen the goods are loaded on board
Insurance The seller arranges it — minimum cover (ICC C), in the buyer’s favour
The most common term in letter-of-credit sea trade. Because cover is narrow, the buyer may ask for an additional policy.
Risk passes to the buyerWhen the goods are handed to the first carrier
Insurance Not compulsory — the buyer, who carries the risk, should arrange it
The all-modes version of CFR; used for road and air.
Risk passes to the buyerWhen the goods are handed to the first carrier
Insurance The seller arranges it — since 2020 wide cover (ICC A) is mandatory
The all-modes version of CIF. Its cover is wider than CIF’s.
Risk passes to the buyerAt the destination address, with the goods on the vehicle ready for unloading
Insurance Not compulsory — the seller carries the risk to destination
For door-delivery sales. Unloading and import clearance are the buyer’s.
Risk passes to the buyerWhen the goods are unloaded from the vehicle at the destination
Insurance Not compulsory — the seller carries the risk until unloading
The only term where unloading also belongs to the seller. It matters for loads needing a crane or forklift.
Risk passes to the buyerAt the destination address, on delivery with import formalities completed
Insurance Not compulsory — the seller carries the risk to destination
The easiest term for the buyer and the riskiest for the seller: the seller pays a foreign country’s taxes.
Three Common Mistakes
Risk and cost do not end in the same place
Under CFR, CIF, CPT and CIP the seller pays freight to destination, but risk passes to the buyer much earlier — at loading. If damage happens en route, the loss is the buyer’s even though the seller paid the freight.
For containers use FCA, not FOB
FOB assumes risk passes when the goods are loaded on board. A container, however, is handed to the terminal days earlier; who is liable in between stays disputable. That is why the ICC recommends FCA for containers.
Write the place with the term
An Incoterm alone is incomplete: term + place + rule year must be written together, as in “FCA Gebze, Türkiye (Incoterms 2020)”. Without the place, where risk passes stays unclear.
This page is a summary; the ICC Incoterms® 2020 text governs the contract. If you are looking for a broker, see the customs listings, and for insurance the insurance listings .
Other sections of the reference