This page provides a quick overview of Incoterms® 2020—how costs, risks, insurance, and compliance responsibilities transfer between buyers and sellers in international (and some domestic) shipments. For Alfiniti orders, we most commonly use EXW, FOB, DAP, and CIP. Use this as practical guidance; always refer to the official ICC text for the complete rules. Incoterms® is a registered trademark of the International Chamber of Commerce (ICC).
How to read this guide
- Delivery & risk: The precise point where risk transfers from seller to buyer.
- Costs: Who pays for which stage (export, main carriage, import).
- Documents & insurance: Typical documents; when insurance is required or optional.
- Customs: Who handles export and import clearance.
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Incoterms® 2020 Explained
EXW — Ex Works (Named Place)
- Delivery & risk: When goods are placed at seller’s premises (or named place) at buyer’s disposal.
- Costs: Buyer pays all transport, loading, export, and beyond.
- Documents & insurance: Seller provides commercial invoice; insurance optional, buyer’s choice.
- Customs: Buyer handles export and import clearance.
FCA — Free Carrier (Named Place)
- Delivery & risk: When seller hands goods to buyer’s carrier at named place (loaded if seller’s premises; otherwise ready for unloading).
- Costs: Seller covers export packaging, customs export; buyer pays main carriage onward.
- Documents & insurance: Transport document/receipt from carrier; insurance optional.
- Customs: Seller exports; buyer imports.
CPT — Carriage Paid To (Named Place of Destination)
- Delivery & risk: Risk transfers at first carrier handover; costs to named destination are seller-paid.
- Costs: Seller pays main carriage; buyer pays import, onward delivery after named place.
- Documents & insurance: Proof of delivery/transport doc; insurance optional.
- Customs: Seller exports; buyer imports.
CIP — Carriage and Insurance Paid To (Named Place of Destination)
- Delivery & risk: Risk transfers at first carrier, like CPT.
- Costs: Seller pays main carriage et la insurance to named place; buyer pays import/onward.
- Documents & insurance: Seller must procure cargo insurance in line with Incoterms® 2020 (more comprehensive than CIF; typically Institute Cargo Clauses (A), unless agreed otherwise).
- Customs: Seller exports; buyer imports.
DAP — Delivered at Place (Named Place of Destination)
- Delivery & risk: When goods are placed at buyer’s disposal on arriving vehicle, ready for unloading at named place.
- Costs: Seller pays through delivery to named place; buyer pays unloading, import duties/taxes.
- Documents & insurance: Delivery proof; insurance optional.
- Customs: Seller exports; buyer imports.
DPU — Delivered at Place Unloaded (Named Place of Destination)
- Delivery & risk: When goods are unloaded at named place and placed at buyer’s disposal.
- Costs: Seller pays through delivery and unloading; buyer pays import duties/taxes.
- Documents & insurance: Delivery proof; insurance optional.
- Customs: Seller exports; buyer imports.
DDP — Delivered Duty Paid (Named Place of Destination)
- Delivery & risk: When goods are placed at buyer’s disposal at named place, ready for unloading.
- Costs: Seller pays everything, including import duties/taxes.
- Documents & insurance: Delivery proof; insurance optional.
- Customs: Seller handles both export and import clearance.
Incoterms® for sea and inland waterway transport (4)
FAS — Free Alongside Ship (Named Port of Shipment)
- Delivery & risk: When goods are placed alongside the vessel at the named port.
- Costs: Seller pays pre-carriage to quay; buyer pays loading, ocean freight, insurance, import.
- Documents & insurance: Dock receipt; insurance optional.
- Customs: Seller exports; buyer imports.
FOB — Free on Board (Named Port of Shipment)
- Delivery & risk: When goods are loaded on board the vessel at the named port.
- Costs: Seller pays origin and loading; buyer pays ocean freight, insurance, import.
- Documents & insurance: On-board bill of lading; insurance optional.
- Customs: Seller exports; buyer imports.
CFR — Cost and Freight (Named Port of Destination)
- Delivery & risk: Risk transfers on board at port of shipment; seller pays freight to destination port.
- Costs: Seller pays ocean freight; buyer pays insurance (if any), import, onward.
- Documents & insurance: Bill of lading; insurance optional (buyer’s choice).
- Customs: Seller exports; buyer imports.
CIF — Cost, Insurance and Freight (Named Port of Destination)
- Delivery & risk: Risk transfers on board at port of shipment; seller pays freight et la insurance to destination port.
- Costs: Seller pays ocean freight and minimum insurance (typically Institute Cargo Clauses (C), unless agreed otherwise); buyer pays import/onward.
- Documents & insurance: Negotiable bill of lading plus insurance policy/certificate.
- Customs: Seller exports; buyer imports.
Insurance note (CIP vs CIF)
- CIP: Higher insurance level by default (more comprehensive).
- CIF: Minimum insurance by default (more limited).
Parties may agree different cover, but it should be stated in the contract.
Compliance & legal notice
This overview is not legal advice and does not replace the official Incoterms® 2020 rules. For authoritative definitions, consult the ICC and purchase the official publication.
Official resources
- ICC Incoterms® rules: iccwbo.org/business-solutions/incoterms-rules/
- ICC Store – Incoterms® 2020: 2go.iccwbo.org/incoterms-2020.html
Alfiniti-specific note
Alfiniti most commonly ships under EXW, FCA/FOB, DAP, et la CIP. Sea-only terms (FAS, FOB [sea sense], CFR, CIF) apply when the main carriage is by ocean vessel.
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