Incoterms 2020 Explained
Who pays for transport, insurance, and customs under each International Commercial Term — EXW through DDP, FOB, CIF, and more.
All Incoterms guides
Do You Need a Customs Broker? Broker vs Forwarder vs Filing Yourself
Three ways to clear customs, what each costs in money and risk, and the cases where self-filing is reasonable — plus the liability that never transfers.
How to Import from China to the USA: The Small Business Playbook
From supplier terms to delivered cargo: registrations, classification, the documents, who files what, and the timeline to plan against for a first China import.
Import Duty from China to the USA: How to Calculate What You Will Pay
Duty from China is now several layers stacked on one entry. How the calculation works, where each rate comes from, and how to estimate before you commit to an order.
How to Find a Verified Freight Forwarder (Without Getting Burned)
"Verified" means nothing until you know who verified what. The six credentials worth checking, where to check each one yourself for free, and the references that actually reveal something.
US Tariffs in 2026 After the IEEPA Ruling: What Importers Actually Pay
The Supreme Court struck down IEEPA tariffs in February 2026 and the duties were rebuilt under other statutes within months. What applies now, and how refunds work.
EU De Minimis Removal 2026: The 3 Euro Flat Duty Explained
The EU ended its 150 euro duty exemption on 1 July 2026. What the transitional flat fee means for ecommerce sellers, 3PLs and anyone shipping parcels into Europe.
CBAM Definitive Period: The 2026 Importer Checklist
CBAM moved from reporting to paying on 1 January 2026. What authorised declarant status means, who is exempt under the 50-tonne rule, and what to do before February 2027.
Customs Audit Readiness: The Import Records You Must Keep
Duty rates rose, so audit activity followed. A practical guide to the records importers must retain, how long to keep them, and the four findings auditors raise most.
DDP vs DAP vs FOB: Understanding International Delivery Terms
DDP, DAP, and FOB are the three most commonly misunderstood Incoterms. Learn exactly what each one means, who pays what, and which is right for your trade.
Import Documentation Checklist: Everything You Need for a Smooth Customs Clearance
Missing or incorrect import documents are the number one cause of customs delays. Use this complete checklist to make sure every shipment is documented correctly.
HS Codes Explained: How to Find the Right Code for Your Cargo
HS codes determine your import duty rate in every country. Getting them wrong is costly. Learn how the Harmonised System works and how to find the right code for your products.
Customs Clearance and Trade Compliance: The Complete Shipper's Guide
Master customs clearance, HS codes, incoterms, import documentation, and trade compliance — everything you need for smooth international shipments.
Incoterms FAQ
What is the most common Incoterm for ocean export?
FOB (Free on Board) is widely used for ocean exports — the seller delivers goods on board the vessel at the port of shipment and risk transfers once loaded. Buyers often prefer FOB when they want to control ocean freight and insurance.
When should I use DDP instead of DAP?
Use DDP when the seller arranges and pays import duties and taxes at destination. Use DAP when the buyer handles import clearance and duties — the seller delivers to an agreed place but does not pay destination customs charges.
Does CIF include insurance?
Yes. Under CIF (Cost, Insurance and Freight) the seller must procure minimum marine insurance for the buyer benefit while the goods are in transit. The buyer should verify coverage limits meet their cargo value and risk profile.
Can I use EXW for international shipments?
EXW places maximum obligation on the buyer — including export clearance from the seller country. Many sellers cannot or will not export under EXW; for international trade FCA, FOB, or CIF/CFR are usually more practical.
Which Incoterm should I use for containerised cargo?
Use FCA, CPT, or CIP rather than FOB, CFR, or CIF. The sea-only rules assume cargo is loaded across the ship's rail, but containers are handed over at a terminal days before loading — so under FOB the seller keeps risk during a period when they no longer control the goods. FCA is the correct equivalent of FOB for containers.
How many Incoterms are there in the 2020 edition?
There are 11 rules, in two families. Seven work for any transport mode: EXW, FCA, CPT, CIP, DAP, DPU, and DDP. Four apply only to sea and inland waterway transport: FAS, FOB, CFR, and CIF. DPU replaced and widened the previous DAT rule in the 2020 edition.
Do Incoterms decide who owns the goods?
No. Incoterms allocate cost, risk, and responsibility for customs formalities — they say nothing about when title or ownership transfers, nor about payment terms or what happens if the contract is breached. Those must be dealt with separately in the sale contract. Assuming an Incoterm transfers ownership is one of the most common and most expensive misunderstandings in international trade.
What is the difference between DAP and DPU?
Unloading. Under DPU the seller must unload the goods at the named destination; under DAP the buyer unloads. Everything else is the same, including that the buyer handles import clearance and pays duties under both. DPU is the only Incoterm that obliges the seller to unload, so only agree it where the seller can realistically arrange equipment at that location.