INCOTERMS® 2020

INCOTERMS® 2020 (short for International Commercial Terms) are a globally recognized set of 11 trade terms published by the International Chamber of Commerce (ICC). They define the responsibilities of buyers and sellers in international transactions—specifically who handles the costs, risks, and logistics at each stage of the shipping process.

Here’s a quick breakdown:

🚚 For Any Mode of Transport:

• EXW (Ex Works) – Buyer takes on most responsibility from the seller’s premises.
• FCA (Free Carrier) – Seller delivers goods to a carrier chosen by the buyer.
• CPT (Carriage Paid To) – Seller pays for transport, but risk transfers earlier.
• CIP (Carriage and Insurance Paid To) – Like CPT, but seller also provides insurance.
• DAP (Delivered at Place) – Seller delivers to the buyer’s location, not unloaded.
• DPU (Delivered at Place Unloaded) – Seller delivers and unloads at destination (replaces DAT).
• DDP (Delivered Duty Paid) – Seller handles everything, including import duties.

🚢 For Sea and Inland Waterway Transport:

• FAS (Free Alongside Ship) – Seller delivers goods next to the ship.
• FOB (Free On Board) – Seller loads goods onto the ship.
• CFR (Cost and Freight) – Seller pays freight, but risk transfers at loading.
• CIF (Cost, Insurance, and Freight) – Like CFR, but seller also insures the goods.

The 2020 update clarified cost allocations, added security obligations, and replaced the term DAT with DPU to better reflect delivery flexibility