Study Guide

Incoterms® 2020 - Rules for Any Modes of Transport

EXW Ex Works

The buyer does (almost) everything.

🚢 All Transport Modes

"Ex Works" means the seller delivers when the goods are placed at the disposal of the buyer at the seller's premises or at another named place (such as works, factory, or warehouse). The seller has no obligation to load the goods onto any collecting vehicle or to clear them for export.

The parties should specify as precisely as possible the point within the named place of delivery, as costs and risk to that point are for the seller's account. The buyer bears all costs and risks from the agreed point onwards.

A buyer purchasing on EXW terms for the purpose of export should be aware that the seller is only required to provide assistance obtaining export clearance — the seller is not obliged to organize it. Buyers who cannot obtain export clearance directly or indirectly are advised not to use EXW. The buyer also has limited obligations to provide the seller with export-related information, though the seller may need such information for taxation or reporting purposes (ICC 2025).

⚠ Risk Transfer: Risk passes to the buyer the moment goods are made available at the seller's premises — before they are even loaded.

FCA Free Carrier

Seller delivers to your carrier — then you take it from there.

🚢 All Transport Modes

"Free Carrier" means the seller delivers the goods to the carrier or another person nominated by the buyer at the seller's premises or at another named place. Risk passes to the buyer at that point.

If delivery is to occur at the seller's premises, the address of those premises must be stated as the named place of delivery. If delivery is to occur elsewhere, a specific alternative place must be identified. FCA requires the seller to clear the goods for export.

⚠ Risk Transfer: Risk passes at the named delivery point when goods are handed to the carrier nominated by the buyer.

CPT Carriage Paid To

Seller contracts and pays for freight — but risk moves earlier.

🚢 All Transport Modes

"Carriage Paid to" means the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place, and contracts and pays for carriage to bring the goods to the named place of destination.

This rule has two critical points, because risk passes and costs transfer at different places. The parties must identify in the contract both the place of delivery (where risk passes to the buyer) and the named destination (where the seller must contract for carriage). If multiple carriers are used and no specific point of delivery is agreed, risk passes when the goods are delivered to the first carrier at a point of the seller's choosing. If the parties wish risk to pass at a later stage — for example, at an ocean port or airport — they must specify this in their contract. CPT requires the seller to clear the goods for export.

⚠ Risk Transfer: Risk transfers to the buyer when goods are delivered to the FIRST carrier — not when they arrive at the destination.

CIP Carriage & Insurance Paid To

Like CPT, but the seller also insures the goods for the buyer.

🚢 All Transport Modes

"Carriage and Insurance Paid to" means the seller delivers the goods to the carrier or another nominated person at an agreed place, and contracts and pays for carriage to the named destination. The seller also contracts for insurance cover against the buyer's risk of loss of, or damage to, the goods during carriage.

Under Incoterms® 2020, the seller under CIP must obtain insurance equivalent to Institute of Cargo Clauses (A), which provides cover against all risks subject to listed exclusions. If the buyer requires additional protection, it must either negotiate this expressly with the seller or arrange its own supplementary cover. CIP requires the seller to clear the goods for export.

⚠ Risk Transfer: Risk passes at the first carrier, same as CPT — but the buyer benefits from the seller's insurance obligation.

DAP Delivered at Place

Seller brings the goods to your door — you handle unloading and import.

🚢 All Transport Modes

"Delivered at Place" means the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to that place.

The parties should specify the point within the agreed destination as precisely as possible, as risks to that point are borne by the seller. If the seller incurs unloading costs under its contract of carriage, those costs cannot be recovered from the buyer unless otherwise agreed.

DAP requires the seller to clear the goods for export, but the seller has no obligation to clear the goods for import, pay import duty, or carry out import customs formalities. Where the seller is to undertake import clearance, DDP should be used instead.

⚠ Risk Transfer: Risk transfers to the buyer when goods are placed at their disposal on the arriving transport at the named destination — but before unloading.

DPU Delivered at Place Unloaded

The seller unloads. You handle import from there.

🚢 All Transport Modes

"Delivered at Place Unloaded" means the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at the named place of destination. The term 'place' includes any location, whether covered or not — a quay, warehouse, container yard, or road, rail, or air cargo terminal. The seller bears all risks involved in bringing the goods to, and unloading them at, the named place.

The parties should specify the 'place' as precisely as possible, and where possible identify a specific point within it, as risks to that point are borne by the seller. If the parties intend the seller to bear the costs and risks of transporting the goods from the terminal to another location, DAP or DDP should be used instead. DPU requires the buyer to clear the goods for import.

⚠ Risk Transfer: Risk passes when the goods are unloaded and placed at the buyer's disposal at the named destination.

DDP Delivered Duty Paid

The seller takes responsibility for everything, end to end.

🚢 All Transport Modes

"Delivered Duty Paid" means the seller delivers the goods, cleared for import on the arriving means of transport, ready for unloading at the named place of destination. The seller bears all costs and risks involved in bringing the goods to destination and is obliged to clear the goods for both export and import, pay all export and import duties, and carry out all customs formalities.

DDP represents the maximum obligation for the seller. If the seller cannot directly or indirectly obtain import clearance, the parties are advised not to use DDP. Where the buyer is to bear all risks and costs of import clearance, DAP should be used. Any VAT or other taxes payable on import are for the seller's account unless expressly agreed otherwise in the contract of sale.

⚠ Risk Transfer: Risk remains with the seller all the way to the named destination — only passing to the buyer on delivery, ready for unloading.