Incoterms

Incoterms® rules define who pays for transport, insurance and clearance — and where risk passes from seller to buyer.

They do not cover price, payment or ownership; those belong in the contract. Choose the rule that matches your transport mode and capabilities.

Incoterms® 2020 rules

EXW — Ex Works: Goods are made available at the seller's premises. The buyer arranges and pays for all transport, export and import clearance.
FCA — Free Carrier: Seller hands export-cleared goods to the buyer's nominated carrier at an agreed place. Risk passes on handover.
FOB — Free On Board: Sea freight only. Seller loads export-cleared goods on board the buyer's vessel at the named port of shipment.
CFR — Cost and Freight: Sea freight only. Seller pays freight to the destination port; risk passes once goods are on board at origin.
CIF — Cost, Insurance and Freight: As CFR, plus the seller buys minimum cargo insurance for the buyer's benefit.
CPT — Carriage Paid To: Any mode. Seller pays carriage to the named destination; risk passes when goods are handed to the first carrier.
CIP — Carriage and Insurance Paid To: As CPT, plus the seller buys comprehensive (Institute Cargo Clauses A) insurance.
DAP — Delivered at Place: Seller delivers to the named place, ready for unloading. Buyer handles import clearance and duties.
DPU — Delivered at Place Unloaded: Seller delivers and unloads at the named place. Buyer handles import clearance and duties.
DDP — Delivered Duty Paid: Seller delivers cleared for import with duties paid. The maximum obligation for the seller.

FOB, CFR and CIF are for sea and inland waterway transport only.
For containers and air freight, FCA, CPT and CIP are often a better fit.
Name the place precisely, e.g. 'FCA Entebbe International Airport'.
Check that insurance matches the rule — CIF and CIP set different minimum cover.