A plain-language reference for the four Incoterms rules we quote under - FOB, CIF, CFR, and DDP - as defined by the ICC's 2020 revision.
The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Risk transfers to the buyer at that point - once the goods are on board, not merely alongside the ship. The seller clears goods for export; the buyer arranges and pays for main carriage, insurance, and import clearance. Sea and inland waterway transport only.
The seller pays the costs, freight, and minimum insurance required to bring goods to the named port of destination. As with FOB, risk transfers to the buyer once goods are on board the vessel at the port of shipment - the seller's payment obligation extends further than FOB, but the risk transfer point does not. Sea and inland waterway transport only.
Similar to CIF, but the seller is not required to arrange insurance - that becomes the buyer's responsibility. Risk transfers at the same point as FOB and CIF: once goods are on board the vessel at the port of shipment. Sea and inland waterway transport only.
The seller bears maximum responsibility: delivery to the named destination, with import duties, taxes, and customs clearance included. Risk transfers to the buyer only once goods are made available at the named destination, cleared for import. Unlike the three terms above, DDP applies to any mode of transport, not just sea/inland waterway.
Your preferred Incoterm is confirmed at the RFQ stage and stated explicitly on every quotation and commercial invoice we issue. If you're unsure which term fits your shipment, our trade desk can walk you through the trade-off between cost certainty and risk exposure for your specific route.
This guide summarizes ICC Incoterms® 2020 rules for general reference. It is not a substitute for the official ICC Incoterms 2020 publication, and specific contractual terms always govern the actual transaction. "Incoterms" is a registered trademark of the International Chamber of Commerce (ICC).