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Incoterms 2020 Responsibility Matrix

All eleven Incoterms 2020 rules side by side: who arranges carriage, who pays freight and insurance, and the exact point at which risk transfers from seller to buyer.

The trap in this list is that cost and risk do not move together. Under CPT, CIP, CFR and CIF the seller pays carriage all the way to the destination while risk passed at origin — so a loss in transit is the buyer’s, on a shipment the seller is still paying for.

Mode
Main carriage paid by

11 of 11 rules

01 / Any mode of transport

RuleRisk passes to buyer atCarriageExportImportInsuranceCompare
EXWEx WorksWhen the goods are placed at the buyer's disposal at the seller's premises.BuyerBuyerBuyerNeither party is obliged to insure.
FCAFree CarrierOn delivery to the carrier the buyer has nominated, at the named place.BuyerSellerBuyerNeither party is obliged to insure.
CPTCarriage Paid ToWhen the goods are handed to the FIRST carrier — not at the destination.SellerSellerBuyerNeither party is obliged to insure.
CIPCarriage and Insurance Paid ToWhen the goods are handed to the first carrier — not at the destination.SellerSellerBuyerSeller must insure to Institute Cargo Clauses (A) — all risks — unless agreed otherwise.
DAPDelivered at PlaceWhen the goods are at the buyer's disposal at the named destination, ready for unloading.SellerSellerBuyerNeither party is obliged to insure.
DPUDelivered at Place UnloadedWhen the goods have been unloaded at the named destination.SellerSellerBuyerNeither party is obliged to insure.
DDPDelivered Duty PaidWhen the goods are at the buyer's disposal at the named destination, cleared for import.SellerSellerSellerNeither party is obliged to insure.
EXW
Maximum obligation on the buyer, who is responsible even for loading. Rarely suitable for export sales, since the buyer must clear goods for export in a country where it may have no standing.
FCA
If the named place is the seller's premises, the seller loads. Anywhere else, the seller delivers ready for unloading. The 2020 revision added an option for the buyer to instruct its carrier to issue an on-board bill of lading to the seller.
CPT
The seller pays carriage to the named destination, but risk has already passed at origin. Cost and risk transfer at different points.
CIP
As CPT, plus insurance. The 2020 revision raised the required cover here to all-risks, while leaving CIF at the minimum — the two are no longer equivalent.
DAP
The seller bears risk all the way to the destination but does not unload, and does not clear for import.
DPU
The only rule under which the seller unloads. Replaced DAT (Delivered at Terminal) in the 2020 revision, and widened it from a terminal to any place.
DDP
Maximum obligation on the seller, who pays import duty and taxes. Requires the seller to be able to act as importer in the buyer's country, which is not always possible.

02 / Sea and inland waterway only

RuleRisk passes to buyer atCarriageExportImportInsuranceCompare
FASFree Alongside ShipWhen the goods are placed alongside the vessel at the named port of shipment.BuyerSellerBuyerNeither party is obliged to insure.
FOBFree on BoardWhen the goods are on board the vessel at the named port of shipment.BuyerSellerBuyerNeither party is obliged to insure.
CFRCost and FreightWhen the goods are on board the vessel at the port of shipment.SellerSellerBuyerNeither party is obliged to insure.
CIFCost, Insurance and FreightWhen the goods are on board the vessel at the port of shipment.SellerSellerBuyerSeller must insure to Institute Cargo Clauses (C) — the minimum cover — unless agreed otherwise.
FAS
Suited to bulk and break-bulk cargo. Not appropriate for containerised goods, which are handed over at a terminal rather than alongside the ship.
FOB
Widely used for containers, though FCA is the rule intended for them — under FOB the seller carries risk until the goods are on board, which is after it has lost control of the container at the terminal.
CFR
The seller pays freight to the destination port; risk passed at origin. Cost and risk transfer at different points.
CIF
As CFR, plus insurance. The required cover is the minimum, not all-risks: if you need broader cover, agree it expressly.

Common questions

Which Incoterm should I use for a containerised chemical shipment?
FCA, CPT or CIP are the rules written for container traffic, because delivery happens when the container is handed to the carrier at a terminal. FOB, CFR and CIF are sea rules that pass risk when the goods are on board the vessel — under those, a seller carries risk over a period when the container is already out of its control at the terminal.
Under CIF, who bears the risk during the sea voyage?
The buyer. The seller pays the freight to the destination port, but risk passed when the goods were loaded on board at origin. Cost and risk transfer at different points under CPT, CIP, CFR and CIF, and assuming they move together is the most expensive misreading in the whole set.
What changed in Incoterms 2020?
DAT was renamed DPU and widened from a terminal to any place. The insurance required under CIP was raised to Institute Cargo Clauses (A), all risks, while CIF was left at Clauses (C), the minimum — so the two are no longer equivalent in cover. FCA gained an option for the buyer to instruct its carrier to issue an on-board bill of lading to the seller.
What is the difference between DAP, DPU and DDP?
All three deliver to a named place in the buyer's country. Under DAP the seller does not unload and does not clear for import. DPU is the only rule where the seller unloads. Under DDP the seller also clears for import and pays duty and taxes, which requires it to be able to act as importer in that country.

Summarised from the ICC Incoterms 2020 rules. The rules themselves are published by the International Chamber of Commerce and are the authority; this page is a reading aid, not a substitute. The term that applies to an order is the one written into that order.

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