Question 1

What is EXW (Ex Works) in Incoterms 2020?

Accepted Answer

The seller makes the goods available at their premises. The buyer bears all costs and risks from that point forward, including export clearance.

Risk transfers: At seller's premises

Seller Responsibilities

Make goods available at premises
Provide commercial invoice
Assist with export formalities (at buyer's cost)

Buyer Responsibilities

All transport from seller's premises
Export and import clearance
All insurance
Loading at origin
All duties and taxes

Best for: Domestic sales or when buyer has strong logistics capability

Question 2

What is FCA (Free Carrier) in Incoterms 2020?

Accepted Answer

The seller delivers goods to a carrier or another person nominated by the buyer at the seller's premises or another named place. Seller responsibilities include: Deliver to carrier at named place, Export clearance, Loading (if at seller's premises), Provide transport document. Buyer responsibilities include: Main carriage, Import clearance, Unloading at destination, All insurance, Import duties and taxes.

Question 3

What is CPT (Carriage Paid To) in Incoterms 2020?

Accepted Answer

The seller pays for carriage to the named destination, but risk transfers when goods are handed to the first carrier. Seller responsibilities include: Main carriage to destination, Export clearance, Delivery to first carrier, Transport document. Buyer responsibilities include: Risk from first carrier, Import clearance, Unloading at destination, All insurance, Import duties.

Question 4

What is CIP (Carriage and Insurance Paid To) in Incoterms 2020?

Accepted Answer

Same as CPT, but seller must also obtain insurance coverage (100% of contract value, Institute Cargo Clauses A). Seller responsibilities include: Main carriage to destination, Export clearance, Insurance (ICC A coverage), Delivery to first carrier. Buyer responsibilities include: Risk from first carrier, Import clearance, Unloading at destination, Import duties.

Question 5

What is DAP (Delivered at Place) in Incoterms 2020?

Accepted Answer

Seller delivers when goods are placed at buyer's disposal on arriving transport, ready for unloading at the named destination. Seller responsibilities include: All transport to destination, Export clearance, All risks until destination, Delivery ready for unloading. Buyer responsibilities include: Unloading, Import clearance, Import duties and taxes.

Question 6

What is DPU (Delivered at Place Unloaded) in Incoterms 2020?

Accepted Answer

Seller delivers when goods are unloaded from arriving transport at the named destination. Only Incoterm requiring seller to unload. Seller responsibilities include: All transport to destination, Export clearance, Unloading at destination, All risks until unloaded. Buyer responsibilities include: Import clearance, Import duties and taxes.

Question 7

What is DDP (Delivered Duty Paid) in Incoterms 2020?

Accepted Answer

Maximum obligation for seller. Delivers goods cleared for import, with all duties paid, at the named destination. Seller responsibilities include: All transport to destination, Export and import clearance, All duties and taxes, All risks until destination. Buyer responsibilities include: Unloading only.

Question 8

What is FAS (Free Alongside Ship) in Incoterms 2020?

Accepted Answer

Seller delivers when goods are placed alongside the vessel at the named port. Used for bulk cargo or non-containerized goods. Seller responsibilities include: Deliver alongside vessel, Export clearance, Costs until alongside ship. Buyer responsibilities include: Loading onto vessel, Main carriage, Import clearance, All insurance, Import duties.

Question 9

What is FOB (Free on Board) in Incoterms 2020?

Accepted Answer

Seller delivers when goods pass the ship's rail at the named port. One of the most commonly used terms for sea freight. Seller responsibilities include: Deliver on board vessel, Export clearance, Loading onto vessel. Buyer responsibilities include: Main sea carriage, Import clearance, All insurance, Unloading at destination, Import duties.

Question 10

What is CFR (Cost and Freight) in Incoterms 2020?

Accepted Answer

Seller pays costs and freight to destination port, but risk transfers when goods are loaded on board at origin. Seller responsibilities include: Main sea carriage, Export clearance, Loading at origin, Freight to destination port. Buyer responsibilities include: Risk from loading, Import clearance, All insurance, Unloading at destination, Import duties.

Question 11

What is CIF (Cost, Insurance and Freight) in Incoterms 2020?

Accepted Answer

Same as CFR, plus seller must obtain minimum insurance (ICC C). Most commonly used term for sea freight. Seller responsibilities include: Main sea carriage, Export clearance, Insurance (ICC C minimum), Freight to destination port. Buyer responsibilities include: Risk from loading, Import clearance, Unloading at destination, Import duties, Additional insurance if needed.

Term	Risk Transfers	Export	Freight	Insurance	Import
EXWEx Works	At seller's premises	B	B	B	B
FCAFree Carrier	When goods are handed to carrier	S	B	B	B
CPTCarriage Paid To	When goods are handed to first carrier	S	S	B	B
CIPCarriage and Insurance Paid To	When goods are handed to first carrier	S	S	S	B
DAPDelivered at Place	At destination, before unloading	S	S	B	B
DPUDelivered at Place Unloaded	At destination, after unloading	S	S	B	B
DDPDelivered Duty Paid	At destination, before unloading	S	S	B	S
FASFree Alongside Ship	Alongside vessel at port	S	B	B	B
FOBFree on Board	On board vessel at port	S	B	B	B
CFRCost and Freight	On board vessel at origin port	S	S	B	B
CIFCost, Insurance and Freight	On board vessel at origin port	S	S	S	B

Incoterms 2020 Explained

EXW

Seller Responsibilities

Buyer Responsibilities

FCA

CPT

CIP

DAP

DPU

DDP

FAS

FOB

CFR

CIF

Quick Comparison

Understanding Incoterms 2020

Why Incoterms Matter

Incoterms 2020 Groups

Sea vs. Any Mode Terms

Pro Tip

Need help choosing the right Incoterm?