Incoterms
Incoterms are the ICC rules that set the delivery point, the transfer of risk, and the split of costs and customs duties between seller and buyer. Incoterms 2020 took effect on 1 January 2020 and contains 11 rules: seven for any mode (EXW, FCA, CPT, CIP, DAP, DPU, DDP) and four for sea and inland waterway only (FAS, FOB, CFR, CIF). Always state rule, place and edition, such as "FOB Tanjung Priok Incoterms 2020". Incoterms do not govern ownership, price or payment.
Related terms
- FOB (Free On Board)
Free On Board means the seller delivers the goods on board the vessel nominated by the buyer at the port of shipment; risk passes once the goods are on board.
- CIF (Cost, Insurance and Freight)
CIF works like CFR, but the seller must also take out cargo insurance for the buyer, at least at Institute Cargo Clauses (C) level and for at least 110% of the contract value.
- FCA (Free Carrier)
Free Carrier means the seller hands export-cleared goods to the carrier nominated by the buyer at an agreed place.
- DDP (Delivered Duty Paid)
Delivered Duty Paid puts the greatest obligation on the seller: goods are delivered to the named place, import-cleared, with duties and import taxes paid by the seller.
Covered in these guides
How to Export from Indonesia: A Step-by-Step Guide for SMEs
Export steps for Indonesian SMEs, from an OSS business ID, HS code and Incoterms to FOB pricing, packing, forwarders, the PEB, payment risk and small shipments.
6 min read Export-importIncoterms 2020 Guide: All 11 Rules for Exporters and Importers
The 11 Incoterms 2020 rules explained, with a cost and risk transfer table, FCA vs FOB for containers, CIP and CIF insurance and how to choose the right rule.
6 min read