INCOTERMS® 2020 GUIDE
Who pays for what — and when does risk change hands?
Incoterms® are the standard trade terms published by the International Chamber of Commerce. They define who arranges and pays for each step of the transport, and at which point the risk of loss or damage passes from the seller to the buyer. The chart below shows, for each of the 11 Incoterms 2020, which costs the seller (blue) and the buyer (light orange) carry, and where the risk transfers (orange marker).
FAQ
Choosing the right terms for your order
Incoterms cover delivery, costs and risk — not ownership, price or payment terms, which are set by your sales contract. For containers, FCA usually fits better than FOB, and under Incoterms 2020 CIP requires broader insurance cover (Institute Cargo Clauses A) than CIF (Clauses C). Whatever terms your supplier offers, we organise the steps that fall on your side.
What are Incoterms?
Standard trade terms published by the International Chamber of Commerce. They define who arranges and pays for each step of the transport, and at which point the risk of loss or damage passes from seller to buyer. The current edition is Incoterms® 2020.
Which Incoterm when buying from Asia?
It depends on how much control you want over the freight. FOB or FCA lets you (or us) choose the forwarder and control freight costs; CFR/CIF or CPT/CIP leaves the main transport to the supplier. We recommend the best option for each order.
Who pays import duties and taxes?
The buyer, under every Incoterm except DDP. With DDP the seller clears the goods for import and pays the duties and taxes in the destination country, so it must be able to act as importer there.