Understanding Incoterms® 2020
International commercial terms that define cost, risk, and responsibility between seller and buyer at every stage of shipment.
What are Incoterms?
A universal language for international trade
Incoterms® are standardized trade terms published by the International Chamber of Commerce (ICC). They define exactly where the seller's obligation ends and the buyer's begins — covering transport, insurance, customs clearance, and risk transfer.
The current edition, Incoterms® 2020, applies to contracts worldwide. Any company using FOB, CIF, or DDP means the same thing regardless of country.
Incoterms® Cost & Risk Distribution Chart
All 11 Terms Explained
Any mode or modes of transport
Seller makes goods available at their own premises. The buyer takes over from there — including export clearance and all transport.
Seller delivers goods to a carrier nominated by the buyer at an agreed origin point, cleared for export.
Seller pays freight all the way to the named destination — but risk passes to the buyer much earlier, at the first carrier.
Same as CPT, plus the seller must buy insurance covering the buyer's risk to destination — at the higher all-risks level.
Seller carries cost and risk all the way to the named destination, ready for unloading. Buyer clears import and unloads.
The only term where the seller also unloads at destination. Seller bears cost and risk right up to unloading complete.
Maximum seller obligation. Seller handles freight, export, import customs and duties, delivering to the buyer's door.
Maritime transport and inland waterways only
Seller pays freight to the destination port, but risk passes to the buyer the moment goods are loaded on board at origin.
Seller delivers on board the vessel at origin. The classic bulk-commodity term — buyer takes over from the moment of loading.
Seller delivers goods alongside the vessel at the origin port. Buyer covers loading, freight and everything after.
Like CFR, with the seller also buying minimum marine insurance to the destination port. Risk still passes at loading.
Not sure which term fits your shipment?
Our logistics team can advise on the right Incoterm for your trade route and cargo type.
Contact Arch Star→