Incoterms Explained

International Trade Made Simple: The 11 Incoterms and What They Mean

Incoterms (International Commercial Terms) are globally recognised rules published by the International Chamber of Commerce (ICC).

They define the responsibilities of buyers and sellers for delivery, risk, and costs in international trade.

01

EXW – Ex Works

Seller’s Responsibility: Makes goods available at their premises.
Buyer’s Responsibility: All transport, export/import clearance, and costs from seller’s door onwards.

02

FCA – Free Carrier

Seller: Delivers goods to a carrier or agreed location.
Buyer: Takes responsibility from that point, including the main carriage.

03

CPT – Carriage Paid To

Seller: Pays for carriage to destination.
Buyer: Assumes risk once goods are handed to the carrier.

04

CIP – Carriage and Insurance Paid To

Same as CPT, but the seller also provides insurance for the buyer’s benefit.

05

DAP – Delivered at Place

Seller: Delivers goods to agreed destination, ready for unloading.
Buyer: Handles import clearance and duties.

06

DPU – Delivered at Place Unloaded

Seller: Delivers and unloads goods at destination.
Buyer: Handles import clearance and duties.

07

DDP – Delivered Duty Paid

Seller: Handles everything – transport, duties, taxes – delivering goods ready for unloading.
Buyer: Simply receives goods.

Sea and Inland Waterway Incoterms

08

FAS – Free Alongside Ship

Seller: Places goods alongside the vessel at the port.
Buyer: Responsible from that point onwards.

09

FOB – Free On Board

Seller: Loads goods onto the vessel.
Buyer: Takes responsibility once goods are on board.

10

CFR – Cost and Freight

Seller: Pays for transport to destination port.
Buyer: Assumes risk once goods are on board.

11

CIF – Cost, Insurance and Freight

Same as CFR, but the seller also provides insurance for the buyer’s benefit.

Why Incoterms Matter

Define who pays for what.

Clarify risk transfer points.

Avoid costly misunderstandings in global trade.

Need Help Choosing the Right Incoterm?

Our experts will guide you to the best option for your shipment, ensuring compliance and cost efficiency. Simplify your international shipping with Transglobal.