Incoterms

Incoterms® 2020, published by the International Chamber of Commerce (ICC), is the edition in force. It contains 11 rules. Seven work for any mode of transport: EXW, FCA, CPT, CIP, DAP, DPU and DDP. Four are for sea and inland waterway only: FAS, FOB, CFR and CIF. Each rule states where delivery happens, when risk passes, who pays which costs and who clears export and import customs.

A common mistake is to assume Incoterms decide when ownership of the goods passes or how and when the buyer pays. They do not: title, payment terms and price belong in the sales contract and, where one is used, the letter of credit. Another frequent confusion is using FOB or CIF for containerized cargo, where FCA or CIP usually fit better because the seller hands the container over at a terminal, not on board.

Always name the rule, a precise place and the edition, for example “FCA Shanghai Incoterms® 2020”, and make the place as exact as a named terminal or warehouse address. A vague place invites disputes over who pays terminal handling or local trucking. For a forwarder, the rule shows which legs to quote, which party pays each charge, and whether insurance is required: under CIF and CIP the seller must buy cover for the buyer.