Incoterms® 2020
EXW - Ex Works
Named place
Under EXW, the seller makes the goods available to the buyer at an agreed location, typically the seller’s factory or warehouse. The buyer is responsible for virtually the entire transport chain from this point, including loading, export formalities, main transport, import clearance and final delivery.
Seller’s responsibility
The seller must prepare and make the goods available at the agreed place and time. The seller is normally not responsible for loading the goods onto the collecting vehicle.
Buyer’s responsibility
The buyer arranges and pays for the transport from the seller’s premises to the final destination, including loading and the relevant customs formalities.
Transfer of risk
Risk transfers to the buyer when the goods are placed at the buyer’s disposal at the agreed place, before loading.
Cargo insurance
The buyer should arrange cargo insurance from the point where the goods are made available by the seller and throughout the remaining transport.
FCA - Free Carrier
Named place
Under FCA, the seller delivers the goods to the carrier or another party nominated by the buyer at the agreed place. FCA is suitable for all modes of transport and is commonly used for containerised shipments.
Seller’s responsibility
The seller is responsible for the goods until they are delivered to the carrier at the agreed place. The seller also handles export clearance. If delivery takes place at the seller’s premises, the seller is responsible for loading the goods onto the buyer’s collecting vehicle.
Buyer’s responsibility
The buyer arranges and pays for the main transport from the agreed delivery point and is responsible for import clearance and onward delivery.
Transfer of risk
Risk transfers from seller to buyer when the goods have been delivered to the carrier or other nominated party at the agreed place.
Cargo insurance
The buyer should arrange insurance from the point where the risk transfers. The seller should ensure appropriate cover until that point.
FAS - Free Alongside Ship
Named port of shipment - sea and inland waterway transport only
Under FAS, the seller delivers the goods alongside the vessel nominated by the buyer at the agreed port of shipment.
Seller’s responsibility
The seller arranges transport to the port, completes export formalities and places the goods alongside the nominated vessel.
Buyer’s responsibility
The buyer is responsible for loading the goods onto the vessel, ocean freight, insurance, import formalities and onward transportation.
Transfer of risk
Risk transfers to the buyer when the goods have been placed alongside the vessel at the agreed port.
Cargo insurance
The seller should have insurance up to the agreed delivery point alongside the vessel. The buyer should arrange insurance from that point onwards.
FOB - Free On Board
Named port of shipment - sea and inland waterway transport only
Under FOB, the seller delivers the goods on board the vessel nominated by the buyer at the agreed port of shipment.
Seller’s responsibility
The seller arranges and pays for transportation to the port, export clearance and loading of the goods on board the nominated vessel.
Buyer’s responsibility
The buyer arranges and pays for the ocean freight from the port of shipment, as well as import clearance and transportation to the final destination.
Transfer of risk
Risk transfers to the buyer once the goods are on board the vessel.
Cargo insurance
The seller should have insurance until the goods are on board the vessel. The buyer should arrange insurance from that point onwards.
CFR - Cost and Freight
Named port of destination - sea and inland waterway transport only
Under CFR, the seller arranges and pays for transportation of the goods to the agreed port of destination. However, the point where the seller pays the freight and the point where the risk transfers are different.
Seller’s responsibility
The seller arranges and pays for transport to the named destination port and handles export clearance.
Buyer’s responsibility
The buyer handles import formalities and transportation from the destination port to the final destination, unless otherwise agreed.
Transfer of risk
Although the seller pays the freight to the destination port, risk transfers to the buyer once the goods are on board the vessel at the port of shipment.
Cargo insurance
The buyer should arrange cargo insurance from the time the goods are loaded on board the vessel.
CIF - Cost, Insurance and Freight
Named port of destination - sea and inland waterway transport only
CIF is similar to CFR, but the seller must also arrange cargo insurance for the buyer’s benefit.
Seller’s responsibility
The seller arranges and pays for transportation to the agreed destination port, export clearance and the required cargo insurance.
Buyer’s responsibility
The buyer is responsible for import clearance and transportation beyond the agreed destination port, unless otherwise agreed.
Transfer of risk
Risk transfers to the buyer when the goods are loaded on board the vessel at the port of shipment - even though the seller pays the freight and insurance to the destination port.
Cargo insurance
The seller must arrange cargo insurance to the agreed destination port. Under Incoterms® 2020, the required minimum insurance for CIF corresponds to Institute Cargo Clauses (C), unless buyer and seller agree on broader coverage.
CPT - Carriage Paid To
Named place of destination
Under CPT, the seller arranges and pays for transportation to the agreed destination. However, risk transfers much earlier in the transport chain.
Seller’s responsibility
The seller arranges and pays for transportation to the named destination and completes export formalities.
Buyer’s responsibility
The buyer is responsible for import clearance and any transportation beyond the agreed destination.
Transfer of risk
Risk transfers to the buyer when the goods are handed over to the first carrier - not when they arrive at the named destination.
Cargo insurance
The buyer should arrange insurance from the point where the goods are handed over to the first carrier.
CIP - Carriage and Insurance Paid To
Named place of destination
CIP is similar to CPT, but the seller must also arrange cargo insurance covering the buyer’s risk during transportation.
Seller’s responsibility
The seller arranges and pays for transportation to the agreed destination, handles export clearance and arranges the required cargo insurance.
Buyer’s responsibility
The buyer handles import clearance and any transportation beyond the agreed destination, unless otherwise agreed.
Transfer of risk
Risk transfers to the buyer when the goods are handed over to the first carrier, even though the seller pays for transportation and insurance to the named destination.
Cargo insurance
Under Incoterms® 2020, the seller must arrange insurance complying with Institute Cargo Clauses (A), or similar coverage, to the agreed destination, subject to the requirements of the Incoterms® rule.
DAP - Delivered at Place
Named place of destination
Under DAP, the seller is responsible for transporting the goods to the agreed destination. The goods are delivered when they are placed at the buyer’s disposal on the arriving means of transport, ready for unloading.
Seller’s responsibility
The seller arranges and pays for transportation to the named destination and bears the risk during the transport to that point. The seller handles export formalities.
Buyer’s responsibility
The buyer is responsible for unloading the goods and for import clearance, including applicable import duties and taxes.
Transfer of risk
Risk transfers to the buyer at the agreed destination when the goods are ready for unloading.
Cargo insurance
The seller should arrange insurance up to the agreed destination. The buyer should arrange cover for any subsequent transportation.
DPU - Delivered at Place Unloaded
Named place of destination
DPU is the only Incoterms® 2020 rule under which the seller is responsible for unloading the goods at destination.
Seller’s responsibility
The seller arranges and pays for transportation to the agreed destination and is responsible for unloading the goods there.
Buyer’s responsibility
The buyer handles import clearance and pays applicable import duties and taxes.
Transfer of risk
Risk transfers to the buyer only after the goods have been unloaded at the agreed destination.
Cargo insurance
The seller should arrange insurance until the goods have been transported to and unloaded at the agreed destination.
DDP - Delivered Duty Paid
Named place of destination
DDP places the greatest level of responsibility on the seller. The seller is responsible for delivering the goods to the agreed destination, cleared for both export and import and with applicable import duties paid.
Seller’s responsibility
The seller arranges and pays for the entire transportation to the agreed destination and handles both export and import customs formalities, including applicable duties.
Buyer’s responsibility
The buyer’s main responsibility is to receive and unload the goods at the agreed destination.
Transfer of risk
Risk transfers to the buyer when the goods are placed at the buyer’s disposal at the agreed destination, ready for unloading.
Cargo insurance
The seller should arrange insurance covering the transport to the agreed destination.
About us.
The person behind ScanCargo is Henrik Sidding Nielsen, who have more than 20 years of experience in the forwarding and logistics. Throughout his career, he has lived and worked in Denmark, Italy and Norway.
Whatever kind of logistic challenge You have, don’t hesitate to contact us. Together, we will find the right solution for you.
Together, we will find a solution based on what is most important for you, using the open book principles.
Contact information.
ScanCargo ApS
Godthåbsvej 27,1
DK8660 Skanderborg
Phone: +45 70 30 23 89
Mobile: +45 42 12 81 05
Mail: hsn@scancargolog.com
Do you have a query?
Please contact us if you have a question about a delivery.