Incoterms 2020 guide
See who pays for what and where risk passes, for all 11 Incoterms 2020 rules. Interactive, free, no login.
Free On Board
The seller loads the goods on board the vessel at the named port. Risk passes once they are on board. A classic sea term for bulk and non-containerised cargo.
Who pays for each step
- Export packagingSeller
- Loading at originSeller
- Carriage to port or place of exportSeller
- Export customs clearanceSeller
- Origin terminal chargesSeller
- Loading onto main carriageSeller
- Main carriage (freight)Buyer
- Destination terminal chargesBuyer
- Carriage to final destinationBuyer
- Import customs clearanceBuyer
- Import duties and taxesBuyer
- Unloading at destinationBuyer
Incoterms is a registered trademark of the International Chamber of Commerce (ICC). This is an educational summary, not the official rules. For the binding text, see the ICC Incoterms 2020 publication.
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Incoterms 2020
What are Incoterms?
Incoterms are the standard trade terms published by the International Chamber of Commerce that define who arranges and pays for transport, insurance and customs, and where risk passes from seller to buyer. The current set is Incoterms 2020.
What changed in Incoterms 2020?
The main changes: DAT was renamed DPU (Delivered at Place Unloaded), CIP now requires a higher level of insurance than CIF, and the rules give clearer guidance on security and on FCA with an on-board bill of lading.
What is the difference between FOB and CIF?
Under FOB the buyer arranges and pays for main freight and insurance from the port of loading. Under CIF the seller pays freight and buys insurance to the destination port, though risk still passes to the buyer once the goods are on board.
Which Incoterms are for sea freight only?
FAS, FOB, CFR and CIF are for sea and inland waterway transport. For containers and multimodal shipments, ICC recommends FCA, CPT, CIP, DAP, DPU or DDP instead.
What is the difference between DAP, DPU and DDP?
Under DAP the seller delivers ready for unloading and the buyer clears import. DPU is the same but the seller also unloads. Under DDP the seller also clears import and pays duty; the buyer only unloads.
Where does risk transfer from seller to buyer?
It depends on the rule. For the E and F terms and the C terms it passes at origin (at the seller's premises, or when goods are handed to the carrier or loaded). For the D terms it passes at the destination. Select a rule above to see its point.
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