Incoterms® 2020 for importers: choosing the right rule
What Incoterms rules do and do not cover, and how the common rules compare for buyers importing goods.
Incoterms® rules, published by the International Chamber of Commerce (ICC), are three-letter trade terms that define where delivery happens, when risk passes and who pays which costs. Always name the rule, the place and the version — for example FCA Shenzhen warehouse, Incoterms® 2020.
What they do not cover
Incoterms rules do not decide when ownership transfers, the payment method, the price or what happens if a party breaches the contract. Those belong in the sales contract.
The rules most importers meet
| Rule | Seller delivers… | Main buyer responsibilities |
|---|---|---|
| EXW | at its own premises | loading, export clearance, all transport and import |
| FCA | to the buyer's carrier at a named place | main carriage, insurance, import |
| FOB | on board the vessel at the port of shipment (sea only) | sea freight, insurance, import |
| CFR / CIF | on board the vessel; seller pays freight (and minimum insurance for CIF) | risk from loading, import |
| CPT / CIP | to the first carrier; seller pays carriage (and broader insurance for CIP) | risk from handover, import |
| DAP | at the named destination, ready for unloading | unloading, import clearance and duties |
| DPU | at the named destination, unloaded | import clearance and duties |
| DDP | at destination, duties paid | unloading |
Practical tips
- For containers handed over at an inland depot, FCA usually fits better than FOB.
- With CIF and CFR, the seller pays freight but risk passes at loading — insure accordingly.
- Your landed cost depends on the rule: under FOB you must add freight and insurance yourself.
Read the official rules from the ICC before relying on them in a contract.