Incoterms 2020 – comparison chart
11 rules, 8 costs, one chart. See who pays for transport, customs clearance and duty – and compare any two rules.
| Rule | Export clearance | Transport to port / terminal | Loading | Main freight | Insurance | Unloading | Import clearance | Duty and VAT | Transport |
|---|---|---|---|---|---|---|---|---|---|
| EXWEx Works | Buyer1 | Buyer | Buyer | Buyer | No obligation | Buyer | Buyer | Buyer | Any |
| FCAFree Carrier | Seller | Seller2 | Seller2 | Buyer | No obligation | Buyer | Buyer | Buyer | Any |
| FASFree Alongside Ship | Seller | Seller | Buyer | Buyer | No obligation | Buyer | Buyer | Buyer | Sea only |
| FOBFree On Board | Seller | Seller | Seller | Buyer | No obligation | Buyer | Buyer | Buyer | Sea only |
| CFRCost and Freight | Seller | Seller | Seller | Seller3 | No obligation | Buyer4 | Buyer | Buyer | Sea only |
| CIFCost, Insurance and Freight | Seller | Seller | Seller | Seller3 | Seller5 | Buyer4 | Buyer | Buyer | Sea only |
| CPTCarriage Paid To | Seller | Seller | Seller | Seller | No obligation | Buyer4 | Buyer | Buyer | Any |
| CIPCarriage and Insurance Paid To | Seller | Seller | Seller | Seller | Seller5 | Buyer4 | Buyer | Buyer | Any |
| DAPDelivered at Place | Seller | Seller | Seller | Seller | No obligation | Buyer4 | Buyer | Buyer | Any |
| DPUDelivered at Place Unloaded | Seller | Seller | Seller | Seller | No obligation | Seller | Buyer | Buyer | Any |
| DDPDelivered Duty Paid | Seller | Seller | Seller | Seller | No obligation | Buyer4 | Seller | Seller | Any |
S – seller pays · B – buyer pays · — – no obligation for either party
Notes on the chart
- EXW – export clearance: formally the buyer’s responsibility. In practice, the export declaration in China is filed by the supplier or a Chinese customs broker, because a foreign buyer is not registered with customs there.
- FCA – transport to the port or terminal and loading depend on the place of delivery. If it is the seller’s premises, the seller loads the goods onto the buyer’s vehicle, and transport to the port or terminal is then the buyer’s responsibility. If it is another place (e.g. a terminal), the seller brings the goods there on its own means of transport, and unloading them is the buyer’s responsibility.
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
How to read the Incoterms 2020 chart
Each row is one of the 11 Incoterms 2020 rules, and each column is a cost that arises on the way from the factory in China to your warehouse. S means the seller pays, B means the buyer pays. The last column shows which modes of transport the rule can be used with.
Cost and risk are two different things
Incoterms settle two questions: who pays for each stage of transport, and at what point the risk of loss of or damage to the goods passes from the seller to the buyer. Under the C rules (CFR, CIF, CPT, CIP), the seller’s costs and the seller’s risk end at different points. The seller pays for transport to Poland, but the risk passes to you while the goods are still in China: under CFR and CIF – when the goods are on board at the port of loading; under CPT and CIP – when the supplier hands them over to the first carrier. If the goods are lost in transit, it is you who has to pursue the claim – so check who insures them and to what extent.
The four groups of rules
- E – EXW. The seller only gets the goods ready for collection. The buyer arranges everything else.
- F – FCA, FAS, FOB. The seller delivers the goods to the carrier in the country of dispatch. The buyer pays for the main carriage.
- C – CFR, CIF, CPT, CIP. The seller pays for the main carriage (and under CIF and CIP also for insurance), but the risk passes to the buyer in the country of dispatch.
- D – DAP, DPU, DDP. The seller delivers the goods to the place of destination and bears the risk up to that place.
Incoterms for rail, sea and air freight
Four rules – FAS, FOB, CFR and CIF – apply only to sea and inland waterway transport. The other seven work with any mode of transport. So for rail freight from China, FOB and CIF are not used. Their equivalents are FCA (the supplier delivers the goods to the terminal, e.g. in Xi’an or Chengdu) and CIP. The ICC also points to FCA as a better choice than FOB for containers in sea freight, because a container is handed over at the terminal several days before loading.
How to write Incoterms in a contract and on an invoice
Always give three things: the rule code, the exact place and the version of the rules, e.g. FCA Ningbo, forwarder’s warehouse, Incoterms 2020 or DAP Łódź, full warehouse address, Incoterms 2020. The same wording should appear in the contract, on the proforma invoice, commercial invoice and packing list. Just “FOB China” or “DAP Poland” is not enough – it does not show where the seller’s costs and risk end.
Which rule should you choose when importing from China?
It depends on how much control you want. Under EXW, FCA and FOB, you choose the freight forwarder, the route and the timing yourself, and you see the transport cost separately. Under the C and D rules, the supplier arranges transport. It is more convenient, but you do not know how much you are really paying for freight – and under the C rules the risk still passes to you in China. With a new supplier, be careful with DDP: if the goods do not go through proper customs clearance, it is the consignee who has the problem. DAP is the safer choice – you then handle customs clearance in Poland yourself. Read more in our article Incoterms DDP – often proposed by Chinese sellers.
Buying on EXW, FCA or FOB terms?
We organise transport from China – by rail, sea or air – together with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFrequently asked questions about Incoterms
What are Incoterms?
Incoterms are international trade rules published by the International Chamber of Commerce (ICC). They define who pays for transport, customs clearance and insurance in a transaction, and at what point the risk passes from the seller to the buyer. The current version is Incoterms 2020, which contains 11 rules.
Are Incoterms mandatory?
No. They only apply if the parties include them in the contract – with the rule code, the place and the version, e.g. “FCA Shenzhen, Incoterms 2020”. The parties can also agree on an older version, such as Incoterms 2010.
Do Incoterms determine when ownership of the goods passes?
No. Incoterms govern costs, risk and obligations (e.g. customs clearance), but not the transfer of ownership or the payment terms. These have to be agreed in the sales contract.
Which rule should I use for rail freight from China?
One of the rules for any mode of transport, e.g. FCA (the supplier delivers the goods to a rail terminal in China), or – if the supplier pays for transport – CPT or CIP. FOB, CFR and CIF apply only to sea and inland waterway transport.
Who pays duty and VAT when importing from China?
Under all rules except DDP, the buyer pays import duty and VAT. Under DDP, they are paid by the seller, who then has to act as the importer in Poland.
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.