What Incoterms are
Incoterms are standard delivery terms published by the International Chamber of Commerce (ICC). They do not govern ownership or payment, but the split of duties between seller and buyer: who arranges transport, who pays and where risk transfers.
Terms for any mode of transport
- EXW — the seller makes goods available at their premises; everything else is for the buyer.
- FCA — the seller hands goods to the buyer's carrier and clears export.
- CPT / CIP — the seller pays carriage to a named place (CIP includes insurance); risk passes earlier, on handover to the first carrier.
- DAP — the seller delivers to the named place ready for unloading; the buyer clears import.
- DPU — as DAP, but the seller also unloads.
- DDP — the seller bears everything, including import duties and taxes.
Terms for sea transport
- FOB — the seller delivers goods on board the vessel at the port of loading.
- CFR / CIF — the seller pays sea freight to the destination port (CIF adds insurance), but risk passes at the port of loading.
- FAS — goods are placed alongside the vessel.
For containerised cargo, FCA, CPT or CIP are often a better fit because risk passes when cargo is handed to the terminal, not when loaded on board.
How to choose
- Want full control of the shipment? Buy on EXW/FCA and let your forwarder arrange it.
- Want a simple delivered price? DAP or DDP, but check import rules in the destination country.
- Always name the exact place: “FCA Riga, warehouse”, not just “FCA”.
- Make sure customs formalities match the chosen term.
Not sure which term suits you? Tell us about the shipment and we will advise free of charge.