Incoterms Guide

This guide helps our clients quickly choose the right Incoterms rule for their shipment. We focus on clarity, compliance , and practical logistics solution.

Incoterms 2020 – Comprehensive Overview

Heiki Global Solutions

1. Full Table of Incoterms 2020

Incoterm	Full Name	Transport Mode	Risk Transfer Point	Cost Responsibility	Business Advice
EXW	Ex Works	Any	At seller’s premises	Buyer pays all costs	Only suitable for buyers with strong logistics control; not ideal for exports due to export-declaration issues.
FCA	Free Carrier	Any	When goods are handed to first carrier	Seller pays until handover	Best all-round Incoterm for exporters; flexible and compliant for container shipments.
FAS	Free Alongside Ship	Sea	Alongside vessel at port of loading	Seller pays until port	Used mainly for bulk or breakbulk cargo; buyer arranges loading.
FOB	Free On Board	Sea	When goods are loaded on vessel	Seller pays until loading	Traditional sea-freight term; avoid for container shipments (use FCA instead).
CFR	Cost and Freight	Sea	When goods are loaded on vessel	Seller pays freight; buyer pays insurance	Good for bulk cargo; buyer must arrange insurance.
CIF	Cost, Insurance & Freight	Sea	When goods are loaded on vessel	Seller pays freight + insurance	Buyer-friendly sea term; seller arranges minimum insurance.
CPT	Carriage Paid To	Any	When goods are handed to first carrier	Seller pays transport; buyer pays insurance	Risk transfers early; suitable for multimodal shipments.
CIP	Carriage & Insurance Paid To	Any	When goods are handed to first carrier	Seller pays transport + insurance	Strong buyer protection; recommended for high-value cargo.
DAP	Delivered At Place	Any	At named destination (not unloaded)	Seller pays all except import duties	Excellent for customer service; seller controls transport to destination.
DPU	Delivered at Place Unloaded	Any	At named destination (unloaded)	Seller pays all except import duties	Ideal when seller can arrange unloading; replaces former DAT.
DDP	Delivered Duty Paid	Any	Buyer’s premises	Seller pays all incl. import duties	Maximum service; high risk for seller due to foreign customs obligations.

2. Expert Guidance on Choosing the Right Incoterm

Experience level considerations

New exporters benefit from FCA or CIP because risk transfer is clear and export formalities remain with the seller.

Transport mode considerations

Sea-only terms (FAS, FOB, CFR, CIF) should not be used for container shipments. For air or multimodal, use FCA, CPT, CIP, DAP, DPU, or DDP.

Risk and insurance considerations

CIF and CIP include insurance arranged by the seller. EXW and FCA transfer risk early, which may not be ideal for inexperienced buyers.

Customs complexity considerations

DDP requires the seller to manage import duties, taxes, and compliance – only advisable if the seller fully understands the destination country’s regulations.

3. Simple Scheduled Advice

· New exporter → Use FCA

· Want best customer service → Use DAP or DPU

· Full service incl. import → Use DDP

. Bulk sea cargo → Use FOB or CFR