Master Incoterms with our comprehensive explainer. Learn about all 11 Incoterms 2020 including EXW, FOB, CIF, DDP, and more. Understand seller and buyer responsibilities, risk transfer points, cost allocation, transport modes, use cases, and common mistakes. Perfect for exporters and importers who want to make informed decisions about trade terms.
Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC). They define the responsibilities, costs, and risks between buyers and sellers in international trade.
The seller delivers when goods pass the ship's rail at the named port of shipment. The buyer bears all costs and risks from that point.
When goods pass ship's rail at port of shipment
Buyer pays all costs from ship's rail
Sea and inland waterway transport only
Incoterms require a named place (e.g., "FOB Mumbai" not just "FOB"). Be specific about the exact location.
Always specify the Incoterm version (e.g., "Incoterms 2020") and the exact named place in your sales contract.
When seller arranges insurance (CIF, CIP), it's minimum coverage only. Buyers may want additional coverage for high-value goods.
Seller is responsible for packaging suitable for transport, unless buyer specifies otherwise.
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