Tools · Incoterms
Compare where cost, risk, and customs responsibility transfer.
Select an Incoterm to see the practical handoff, then compare all eleven Incoterms 2020 rules in the table.
Risk transfers: Named destination, import cleared
| Rule | Risk transfer | Freight | Insurance | Import |
|---|---|---|---|---|
| EXW | At seller's premises | Buyer | Buyer | Buyer |
| FCA | At named carrier/location | Buyer | Buyer | Buyer |
| CPT | First carrier | Seller | Buyer | Buyer |
| CIP | First carrier | Seller | Seller | Buyer |
| DAP | Named destination, ready to unload | Seller | Seller | Buyer |
| DPU | Named destination, unloaded | Seller | Seller | Buyer |
| DDP | Named destination, import cleared | Seller | Seller | Seller |
| FAS | Alongside vessel | Buyer | Buyer | Buyer |
| FOB | On board vessel | Buyer | Buyer | Buyer |
| CFR | On board vessel | Seller | Buyer | Buyer |
| CIF | On board vessel | Seller | Seller | Buyer |
Use it carefully
The named place is part of the rule.
“FOB” or “DAP” without a precise port, terminal, or address leaves the handoff ambiguous. Put the named place and edition in the sales contract.
Freight planning guide
How to choose and write an Incoterms 2020 rule
Incoterms rules divide delivery, transport cost, risk, insurance obligations, and customs tasks between seller and buyer. They do not replace the sales contract or decide ownership, payment timing, product quality, or every consequence of delay.
The named place makes the three-letter rule usable
Write the selected rule with a precise place and edition, for example ‘FCA seller's warehouse, Shenzhen, Incoterms 2020’ or ‘DAP buyer's address, Berlin, Incoterms 2020.’ The named place identifies the delivery point or destination relevant to the rule. A term such as FOB, FCA, or DAP without that location leaves a central part of the agreement unresolved.
Separate cost from risk when comparing options. Under several C-rules, the seller pays the main carriage even though risk transfers earlier, at shipment or handover to the first carrier. Paying freight to the destination does not necessarily mean the seller carries transit risk until arrival. The chosen rule must be read as a complete allocation, not interpreted from who receives the freight invoice.
Match the rule to the mode, control, and customs reality
FAS, FOB, CFR, and CIF are intended for sea or inland-waterway transport. For container cargo handed to a terminal before loading, FCA, CPT, or CIP may describe the operational handover more accurately. The right choice depends on where delivery can actually be evidenced, who contracts carriage, and which party can manage export and import formalities.
Use DDP carefully. It assigns import clearance and import duties to the seller, but a foreign seller may be unable to act as importer or register for local taxes in the destination. DAP leaves import clearance with the buyer, while DPU additionally requires the seller to unload at the named destination. Validate the local importer arrangement before promising a delivered term.
Put operational details outside the Incoterm into the sales contract or shipping instructions: document deadlines, booking process, packaging, inspection, insurance amount, demurrage response, delivery appointment, and who approves exceptional costs. The rule supplies a standard framework; it does not remove the need for a precise commercial scope.
Questions to settle before selecting a rule
- Where can delivery and risk transfer be clearly evidenced for the actual transport mode?
- Which party can obtain export clearance, act as importer, and manage destination taxes lawfully?
- Who should control the main-carriage booking, insurance, routing, and carrier relationship?
- What exact terminal, port, warehouse, or street address will be written as the named place?
Plan your shipment
Turn the result into a shipping plan.
Use the Incoterms guide to define buyer and seller responsibilities, and prepare product details for customs clearance review. For a DDP shipping quote, ask which duties, taxes, and destination charges are included.
For Amazon deliveries, review the FBA preparation workflow. For other receiving locations, define the door-to-door delivery scope as part of your e-commerce logistics plan.
Prepare the remaining inputs with the shipping guide, compare freight solutions, and bring the result to the China freight forwarding team. For more detailed explanations, browse the logistics articles.
Do Incoterms decide when ownership of the goods transfers?
No. Incoterms rules address delivery obligations, risk, allocated costs, transport-related documents, and export or import tasks. They do not determine title transfer or payment timing. Put ownership, payment, inspection, remedies, and governing law in the sales contract instead of assuming the three-letter trade term resolves them.
What is the difference between DAP and DDP?
Under both rules, the seller arranges carriage to the named destination and bears risk to the defined delivery point. Under DAP, the buyer handles import clearance and import duties. Under DDP, the seller takes those import obligations, which may be impractical where a foreign seller cannot lawfully act as importer.
Why can FCA be better than FOB for container shipments?
A container is often handed to a carrier or terminal before it is loaded aboard the vessel. FCA can place delivery and risk transfer at that actual handover point. FOB transfers risk only when goods are on board and is intended for sea or inland-waterway transport, so the documented operation may fit FCA better.
Does CIF or CIP mean every cargo loss is fully insured?
Both rules require the seller to contract cargo insurance, but the required level and applicable transport mode differ. Coverage still has limits, exclusions, deductibles, valuation rules, and claim procedures. Review the policy or certificate against the cargo and route rather than treating the Incoterm as a promise that every loss will be reimbursed.
Need the result checked against a real shipment?
Share the cargo, lane, and target date. One agent will turn the planning input into a workable freight scope.