Incoterms 2020 Explorer
Pick any of the 11 Incoterms 2020 rules and see it laid out plainly — who pays each leg, exactly where the risk passes from seller to buyer, and a stage-by-stage split of who does what. The terms set the deal; this shows you what you’re signing up for.
Selected rule
Stage-by-stage responsibility
Seller S Buyer B — a summary of the standard split. The exact division of terminal charges and on-carriage can be tuned in your sales contract.
What Incoterms decide
An Incoterm is shorthand for three things in a sale: who arranges and pays for each leg of transport, who handles customs on each side, and — the part that costs money when it goes wrong — the point at which risk of loss or damage passes from seller to buyer. Agree the term and you’ve agreed the division of labor and liability.
Cost and risk can split apart
The C-rules are the classic trap. Under CPT, CIP, CFR, and CIF the seller pays the freight to the destination, but the risk has already passed to the buyer at origin. If the cargo is lost mid-voyage, it’s the buyer’s problem even though the seller booked the carriage — which is exactly why CIF and CIP carry an insurance obligation.
The two families
Seven rules work for any mode (road, rail, air, sea, or multimodal): EXW, FCA, CPT, CIP, DAP, DPU, DDP. Four are for sea and inland waterway only, because they hinge on the ship’s rail: FAS, FOB, CFR, CIF. Using a sea-only term for an air or container-door shipment is a common and avoidable mistake.
A plain-language summary of Incoterms® 2020. The rules themselves, published by the ICC, are the authority; your contract can refine the details.