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Assumption of costs along the transport chain
Transfer of risk along the transport chain
Seller bears
Buyer bears
How do the Incoterms 2020 work?
The Incoterms® (International Commercial Terms) of the International Chamber of Commerce govern how costs, risk and obligations are allocated between seller and buyer. They do not govern not transfer of ownership, payment or applicable law. What is always decisive is the named place behind the rule.
The most important point: with the C rules (CPT, CIP, CFR, CIF) the transfer of costs and risk diverge. The seller pays the main carriage to the destination, but the risk passes to the buyer already upon handover to the first carrier or on board.
| Group | Rules | Core |
|---|---|---|
| E | EXW | Collection rule – minimal seller obligation |
| F | FCA, FAS, FOB | Main carriage paid by the buyer |
| C | CPT, CIP, CFR, CIF | Main carriage paid by the seller – risk passes earlier |
| D | DAP, DPU, DDP | Arrival rules – seller delivers to the destination |
Simplified representation for information purposes. The exact cost split depends on the named place and the contractual agreement. The original text of the Incoterms® 2020 of the ICC is authoritative. Not legal advice.
The right rule for your supply relationship
The Pro support reviews your supply chains, recommends the appropriate rule for each lane and formulates the contractually sound Incoterms specification including the named place. This service is provided exclusively on request and after coordination.
- Rule selection per lane & mode of transport
- Contractually sound wording incl. named place
- Cost & risk analysis per supply relationship
- Insurance & customs clearance concept
- Training for purchasing, sales & dispatching
- Review of existing contracts & T&Cs
No legal advice. Provided only on request.