Incoterms® Rules (Applicable to All Modes of Transport)
Incoterms® 2020 are a set of standardized international commercial terms developed and published by the International Chamber of Commerce (ICC). They are widely used in global trade to clearly define the responsibilities of sellers and buyers throughout the transportation process, including the allocation of tasks, costs, and risks.
The Incoterms® rules are expressed as three-letter abbreviations, each specifying:
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the point at which the risk transfers from the seller to the buyer
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who bears the costs of transportation
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who is responsible for customs procedures
Recognized by governments and international trade organizations worldwide, Incoterms® serve as a fundamental framework for conducting international business. First introduced in 1936, they are periodically updated to reflect evolving trade practices. The current version, Incoterms® 2020, came into effect on January 1, 2020.
Incoterms® Rules (Applicable to All Modes of Transport)
This term places maximum responsibility on the buyer and minimum responsibility on the seller.
The seller makes the goods available at their premises (factory or warehouse) at the agreed time. The buyer bears all costs and risks of transportation to the final destination, including export and import formalities.The seller fulfills their obligation when the goods, cleared for export, are handed over to the carrier nominated by the buyer at the specified location.
From this point, the risk transfers to the buyer. Export customs procedures are the seller’s responsibility.The seller pays for transportation to the agreed destination.
However, risk transfers to the buyer once the goods are handed over to the first carrier, even though the seller covers transport costs.The seller arranges and pays for transportation and also provides cargo insurance during transit.
Risk transfers to the buyer once the goods are handed over to the first carrier. Under Incoterms® 2020, insurance must provide extended coverage.The seller delivers the goods to the agreed destination, ready for unloading.
All risks remain with the seller until delivery. Import customs clearance and duties are the buyer’s responsibility.The seller delivers the goods and ensures unloading at the destination.
Risk transfers to the buyer only after unloading is completed.The seller assumes maximum responsibility, delivering goods to the buyer with all import duties and taxes paid.
The buyer receives the goods with minimal obligations.
Rules for Sea & Inland Waterway Transport Only
The seller delivers goods alongside the vessel at the named port.
From this point, risk and costs transfer to the buyer.The seller fulfills their obligation once goods are loaded onto the vessel.
Risk transfers to the buyer at that moment.The seller pays for sea freight to the destination port.
Risk transfers once goods are loaded onto the vessel.The seller pays for sea freight and provides insurance.
Risk transfers at loading, while insurance coverage is typically minimum.