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Incoterms in one page: who pays, who carries risk
A responsibility map for EXW, FCA, FOB, CFR, CIF, DAP and DDP — who books the freight, who clears customs, who pays duty — with every rule sourced.
Most arguments I have had about a purchase order were arguments about one thing: the point at which the seller stops being responsible. Incoterms 2020 answers that in eleven three-letter terms (ICC, Incoterms 2020, retrieved 9 October 2026). Three letters are cheap to type onto a quotation and expensive to misread, so the map below is the one I keep next to the file.
It covers seven of the eleven rules. The four I leave out of the tables — FAS, CPT, CIP and DPU — are mentioned where they matter.
The cost and task map
| Rule | Inland freight to the export port | Export customs | Main freight to destination | Cargo insurance | Import customs and duty |
|---|---|---|---|---|---|
| EXW Ex Works | Buyer | Buyer¹ | Buyer | Buyer | Buyer |
| FCA Free Carrier | Buyer² | Seller | Buyer | Buyer | Buyer |
| FOB Free on Board | Seller | Seller | Buyer³ | Buyer | Buyer |
| CFR Cost and Freight | Seller | Seller | Seller⁷ | Buyer | Buyer |
| CIF Cost, Insurance and Freight | Seller | Seller | Seller⁷ | Seller, minimum cover⁴ | Buyer |
| DAP Delivered at Place | Seller | Seller | Seller | No insurance obligation on the seller⁵ | Buyer |
| DDP Delivered Duty Paid | Seller | Seller | Seller | No insurance obligation on the seller⁵ | Seller⁶ |
¹ EXW: the seller places the goods at the buyer’s disposal, not loaded onto any collecting vehicle, and does not clear them for export; where official documents are needed, it assists the buyer at the buyer’s risk and cost. (GOV.UK, Customs valuation: Incoterms; ICC Academy, FCA & EXW, retrieved 9 October 2026)
² FCA has two delivery points. At the seller’s premises the seller loads the goods onto the buyer’s collecting vehicle. At any other named place it delivers them to the buyer’s carrier, ready for unloading. Export clearance is the seller’s either way; import formalities are the buyer’s. (ICC Academy, FCA & EXW, retrieved 9 October 2026)
³ FOB: the buyer must contract the carrier and pay the transportation costs. (ICC Academy, FCA & FOB, retrieved 9 October 2026)
⁴ CIF keeps Institute Cargo Clauses (C) as its default level, the ICC’s minimum, with the option to agree more. CIP, the container-mode sibling, now requires cover compliant with Clauses (A). (ICC, Incoterms 2020 key changes; ICC Academy, CIF & CIP, retrieved 9 October 2026)
⁵ DAP and DDP place no insurance obligation on the seller. That does not mean the goods are uninsured; it means the rule does not require it, and silence is not cover. (ICC Academy, DAP & DDP, retrieved 9 October 2026)
⁶ DDP, in GOV.UK’s wording: the seller “must clear the products not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.” (GOV.UK, retrieved 9 October 2026)
⁷ Rows that repeat a source: the buyer’s import formalities under EXW, FCA, FOB, CIF and DAP appear in the ICC Academy articles cited in notes 1–5; under the C rules the seller pays carriage to the destination port only, per GOV.UK’s CFR line. (retrieved 9 October 2026)
The same set, arranged by where risk moves. Read the CFR and CIF rows twice; the destination and the place of delivery are two different places.
| Rule | Delivery happens, and risk passes, when the goods are… |
|---|---|
| EXW | placed at the buyer’s disposal at the named place, not loaded on any collecting vehicle |
| FCA | loaded onto the buyer’s collecting vehicle at the seller’s premises, or handed to the buyer’s carrier at another named place |
| FOB | loaded on board the vessel nominated by the buyer at the named port of shipment |
| CFR | loaded on board the vessel at the port of shipment |
| CIF | loaded on board the vessel at the port of shipment |
| DAP | at the buyer’s disposal at the named destination, still on the arriving vehicle, ready for unloading |
| DDP | at the buyer’s disposal at the named destination, cleared for import, ready for unloading |
Sources, row by row: EXW and FCA from ICC Academy, FCA & EXW; FOB and CFR from GOV.UK and ICC Academy, FCA & FOB; CIF from ICC Academy, CIF & CIP; DAP and DDP from ICC Academy, DAP & DDP and GOV.UK. That a C-rule’s place of delivery is not its destination is ICC Academy, Place of delivery and risk transfer, whose worked example is CIF. All retrieved 9 October 2026.
Two more rows belong here. DPU (Delivered at Place Unloaded) is DAP with the unloading done by the seller; it is the renamed DAT, changed to make clear the destination can be any place, not only a terminal. CIP is CIF rebuilt for containers and air, with all-risk insurance and any-mode carriage. (ICC, Incoterms 2020 key changes; ICC Academy, DAP & DPU, retrieved 9 October 2026)
Choosing for a first small order
The choice is decided by three questions, and only the first one is about money.
Can you lodge the import declaration at the destination? If you can, or you have a broker who can, you have the whole field to choose from. If you cannot, you choose between a rule that puts import clearance on the seller (DDP) and appointing someone who can clear, which brings you back to the whole field.
How does the goods move? If they fly, or they travel in a container, FCA is the rule built for that path. FOB is written for goods loaded on a vessel at a port, and the ICC says FOB should not normally be used for container shipments because the seller loses control of the container at the port of export before it is loaded. FCA was revised in this edition so that the parties can agree the buyer will instruct the carrier to issue an on-board bill of lading to the seller — the document that made sellers cling to FOB in the first place. (ICC, Incoterms 2020 key changes; ICC Academy, Incoterms 2020 vs 2010, retrieved 9 October 2026)
Whose freight rate is better? If yours is, FCA or FOB keeps you as the one booking. If the seller’s is clearly better, CFR or CIF lets them book — and you accept that your risk starts at the loading port, which the CFR and CIF rows above make plain.
Three sketches, and what I would put on the order:
| Situation | Rule I would use | Why |
|---|---|---|
| Samples or a first trial order by air, you can clear import yourself or through a courier acting for you | FCA at the seller’s premises | The seller loads and clears export; your carrier and your broker take it from the airport; the delivery point is one place you can verify |
| A small run by sea, your own forwarder, no need for the seller’s rate | FCA at the container terminal | Same split as above, and it sidesteps the container problem FOB carries |
| A low-value order, no importer registration at your end, and paying a broker a fixed fee would dwarf the shipment | DDP, after checking the seller can legally act as importer of record where you are | DDP is the only rule that moves import clearance onto the seller; the freight, duty and clearance all sit inside one number you cannot itemise |
That last row is where judgement enters, so I will name it as judgement. The lower the shipment value, the harder it is to justify a broker’s minimum fee, and that asymmetry is why DDP quotes are common on small air shipments. That is my reading of the incentive, not a rule.
If your channel is a marketplace that quotes you a landed price, the question is already answered by someone else’s paperwork. My reading is that the platform is usually the importer of record, and its terms rather than your purchase order decide who clears. I have not tested that.
The five things people get wrong
Under FOB the buyer books the freight. The most common sentence I hear from a first-time buyer is that “the factory handles shipping under FOB.” FOB ends when the goods are on board the vessel. The buyer nominates the vessel, contracts the carrier and pays for the carriage, and the buyer clears import and pays duty. FOB is a shipping term the buyer has to operate. (ICC Academy, FCA & FOB; GOV.UK, retrieved 9 October 2026)
Under CIF and CFR, risk ends at the loading port. The name says “to the port of destination,” so a buyer reasonably reads the seller as responsible until the goods arrive. The ICC is explicit that in the C rules the place of delivery and the destination are not the same place, and risk passes when the goods are on board at the port of shipment. A CIF buyer owns the risk of the ocean crossing, and cannot claim against the seller if the ship goes down. (ICC Academy, Place of delivery and risk transfer; ICC Digital Library, retrieved 9 October 2026)
Under CIF the insurance is minimum cover. The seller must insure to Institute Cargo Clauses (C). That is not all risks. GOV.UK states the consequence plainly: “under CIF the seller is required to obtain insurance only on minimum cover,” so a buyer who wants more must agree it with the seller or arrange its own. (GOV.UK; ICC, Incoterms 2020 key changes, retrieved 9 October 2026)
DDP looks like the least work, and it is the heaviest term for the seller. Under DDP the seller owes an obligation it can only perform inside your country. The ICC’s own guidance flags this and says that if the seller does not want to manage import clearance, or is prevented by local rules from doing so, DAP is the more suitable rule. And freight, duty and clearance sit inside the DDP number, so it cannot be compared line by line with an FOB number. (ICC Academy, DAP & DDP, retrieved 9 October 2026)
EXW is a domestic-looking term. The seller does not clear export, and loading is the buyer’s risk and cost. For goods that will cross a border, the ICC’s guidance is to consider FCA instead. EXW survives in quotations mostly because it is the shortest thing to type. (ICC Academy, FCA & EXW; GOV.UK, retrieved 9 October 2026)
One correction that is not about any single rule: Incoterms do not decide who owns the goods, they do not set the payment method or its timing, and they are not the contract. They only become part of the contract when the contract says so, and they say nothing about the law that governs it. (ICC Digital Library, Incoterms and Commercial Contracts; trade.gov, Know Your Incoterms, retrieved 9 October 2026)
How I built the table
The normative text is ICC Publication 723, the book of the rules themselves (ICC Knowledge 2 Go, retrieved 9 October 2026). It is paid, and I did not buy it, so nothing above quotes a clause. Every cell is a free ICC summary of its rule — the ICC’s own Incoterms 2020 page and the ICC Academy rule articles, most of which carry an ICC-certified trainer’s byline — or a government restatement of the same rule. Where the ICC and a government page covered the same row, they agreed. That is a thin check.
The ICC also publishes an A4 chart setting out the obligations, costs and risks of both parties under each of the eleven rules on one page (ICC, Incoterms 2020 practical free wallchart, retrieved 9 October 2026). It is the closest thing to the sheet this article imitates, and the chart warns against using it without the rule book.
The footnotes carry the source for each row, so a reader who dislikes my table can go and disagree with the ICC.
What I could not check
- The rules text itself. ICC Publication 723 costs money and I did not buy it. The lines above are the ICC’s summaries of its rules, not the clauses. Article numbers appear only where an ICC page names them, such as FCA’s A6/B6 and the consolidated costs article A9/B9 (ICC, Incoterms 2020 key changes, retrieved 9 October 2026).
- Whether the wallchart matches my table. I read the chart’s headings and the ICC’s description of it, not every cell at print resolution. Where the two disagree, the chart is the ICC’s own and mine is a reading of it.
- What a DDP price contains, tax by tax. The rule puts import clearance and duty on the seller, and the ICC’s DDP article lists tariffs and taxes among what the price covers. It is silent on value-added tax, GST and sales tax, whose treatment differs by jurisdiction and by whether the seller can recover it.
- Whether a non-resident seller can be importer of record where you are. The ICC warns that local rules may prevent the seller from clearing import, and recommends DAP in that case. I found no per-country list, so the check is a question to ask, not a table to read.
- Marketplace landed-price terms. My line about the platform being importer of record is my reading of how those quotes are built, not something I verified against a platform’s contract.
- Broker minimum fees and typical DDP margins. No primary publisher I would cite. My argument that low-value shipments drift towards DDP is reasoning about incentives, and the sketches above are judgement, not data.
- The four rules I did not tabulate. FAS, CPT, CIP and DPU are described in passing, not compared row by row.