Insights
Shipping responsibility and cost terms explained through Incoterms guidance and reference articles.
11 rules · Incoterms® 2020 · Expert-reviewed educational guidance
Incoterms(R) 2020 rules allocate specified tasks, costs, and risks between seller and buyer. Always name the agreed place or port and the edition in the contract.
Example contract detail: FOB Port of Houston, Texas, Incoterms(R) 2020. Replace the example location with the parties' actual agreed place or port.
Last reviewed July 30, 2026. Edition reference: Incoterms® 2020 (not a new calendar-year edition).
Cards are grouped by transport classification so EXW and CIF read as different tools - not interchangeable article excerpts.
Showing 11 of 11 terms
Any mode or multimodal. These seven rules can apply beyond ocean-only moves.
Ex Works
Under EXW, the seller makes the goods available at its premises or another named place. The buyer bears nearly all costs and risks from that point forward.
Risk: Seller / exporter
Main carriage: Buyer
Insurance: not required by the rule
Compare with FCAFCA usually fits export shipments better when the seller should clear export formalities.
Free Carrier
Under FCA, the seller delivers the goods to the carrier or another person nominated by the buyer at the named place. Risk transfers at that delivery point.
Risk: Origin terminal
Main carriage: Buyer
Insurance: not required by the rule
Compare with FOBFOB requires on-board delivery and is limited to sea/inland waterway.
Carriage Paid To
Under CPT, the seller arranges and pays carriage to the named destination place, but risk transfers when the goods are handed to the first carrier.
Risk: Carrier handoff
Main carriage: Seller
Insurance: not required by the rule
Compare with CIPCIP adds a seller insurance obligation.
Carriage and Insurance Paid To
Under CIP, the seller pays carriage to the named destination place and must also obtain cargo insurance for the buyer’s benefit. Risk still transfers at origin handoff to the carrier.
Risk: Carrier handoff
Main carriage: Seller
Insurance: seller obligated
Compare with CPTCPT is similar but without a seller insurance obligation.
Delivered at Place
Under DAP, the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place.
Risk: Final delivery
Main carriage: Seller
Insurance: not required by the rule
Compare with DPUDPU requires the seller to unload.
Delivered at Place Unloaded
Under DPU, the seller delivers when the goods are unloaded from the arriving means of transport and placed at the buyer’s disposal at the named place.
Risk: Destination terminal
Main carriage: Seller
Insurance: not required by the rule
Compare with DAPDAP stops at ready-for-unloading; DPU requires unloading.
Delivered Duty Paid
Under DDP, the seller delivers goods placed at the buyer’s disposal, cleared for import, on the arriving means of transport ready for unloading at the named place.
Risk: Final delivery
Main carriage: Seller
Insurance: not required by the rule
Compare with DAPDAP leaves import clearance and duties with the buyer.
Sea or inland waterway only. Use these when the named handoff is a waterway port.
Free Alongside Ship
Under FAS, the seller delivers when the goods are placed alongside the vessel nominated by the buyer at the named port of loading.
Risk: Origin terminal
Main carriage: Buyer
Insurance: not required by the rule
Compare with FOBFOB requires goods on board, not merely alongside.
Free On Board
Under FOB, the seller delivers the goods on board the vessel nominated by the buyer at the agreed port of loading. Risk of loss or damage transfers to the buyer at that point.
Risk: On board vessel
Main carriage: Buyer
Insurance: not required by the rule
Compare with FCAVessel loading versus carrier handoff
Cost and Freight
Under CFR, the seller delivers the goods on board the vessel and pays the cost of carriage to the named destination port. Risk transfers to the buyer when the goods are on board at the port of shipment—not when they arrive at the destination.
Risk: On board vessel
Main carriage: Seller
Insurance: not required by the rule
Compare with CIFCIF adds a seller insurance obligation while keeping similar origin risk transfer.
Cost, Insurance and Freight
Under CIF, the seller delivers goods on board, pays carriage to the named destination port, and must obtain cargo insurance for the buyer. Risk still transfers when goods are on board at origin.
Risk: On board vessel
Main carriage: Seller
Insurance: seller obligated
Compare with CFRCFR is similar but without a seller insurance obligation.
Printable reference
The full transport mode, carriage, clearance, insurance, and responsibility matrix is available as a PDF rather than displayed inline on this page.
Download PDF comparison matrixEducational reference only. Crane does not provide legal advice or select contractual terms for the parties.
When research turns into an operational shipment, connect the term to the teams that execute freight, clearance, insurance, and trade advice.
Service
Our broad portfolio of ocean freight carriers offers the flexibility of departure dates and decreases transit times for all your ocean shipping needs. Global FCL & LCL shipping services available.
Explore Ocean Freight →
Service
Crane Worldwide Logistics delivers comprehensive Air Freight solutions designed to move your cargo efficiently and reliably across the globe.
Explore Air Freight →
Service
We have both national and international trucking services available to suit our client's needs. Request a trucking quote today!
Explore Ground Services →
Service
Crane Worldwide Logistics offer certified customs brokerage services throughout the United States. Need a customs broker? Get in touch with a customs agent today!
Explore Customs Brokerage →
Service
What is cargo insurance and why do you need coverage for the transportation of your goods?
Explore Cargo Insurance →
Service
Our international trade advisory services program is designed to deliver expert international trade and compliance information when you need it the most.
Explore Trade Advisory →Discuss trade, compliance, or supply-chain implications with our team — or subscribe for ongoing updates.
