Resource Guide
Incoterms Explained
International Commercial Terms (Incoterms) define the responsibilities of buyers and sellers in international trade. Here's a simple guide to the most common terms.
EXWAll
Ex Works
Seller makes goods available at their premises. Buyer handles everything from pickup.
Main responsibility:Buyer
FCAAll
Free Carrier
Seller delivers goods to carrier at named place. Risk transfers at that point.
Main responsibility:Shared
FOBSea only
Free On Board
Seller delivers goods on board the vessel. Risk transfers when goods are on ship.
Main responsibility:Shared
CIFSea only
Cost, Insurance & Freight
Seller pays for freight and insurance to destination port. Risk transfers on shipment.
Main responsibility:Seller (to port)
CFRSea only
Cost & Freight
Seller pays freight to destination port. Insurance is buyer's responsibility.
Main responsibility:Seller (to port)
DAPAll
Delivered At Place
Seller delivers to named place, buyer handles import clearance and unloading.
Main responsibility:Seller (to destination)
DDPAll
Delivered Duty Paid
Seller handles everything including import duties. Maximum seller responsibility.
Main responsibility:Seller (fully)
Quick Comparison
| Term | Freight | Insurance | Risk Transfer |
|---|---|---|---|
| EXW | Buyer | Buyer | At seller's premises |
| FOB | Buyer | Buyer | On board vessel |
| CIF | Seller | Seller | On board vessel |
| DAP | Seller | Optional | At destination |
| DDP | Seller | Seller | At buyer's door |