Essential
Incoterms Selector
Choosing the wrong Incoterm is one of the easiest ways to end up paying for freight, insurance, or customs clearance you didn't expect to cover. Answer five practical questions about your shipment and this tool suggests a starting Incoterm 2020 term to discuss with your counterparty and forwarder.
Primary transport mode?
Step 1 of 5
Results are indicative only. Rates, transit times, classifications, and charges vary by carrier, lane, and contract. For binding quotes, post a request on CargoLinked or contact your forwarder.
How it works
The selector walks through five questions: transport mode, who arranges main carriage, who provides cargo insurance, who handles import clearance, and where delivery actually happens (seller's premises, port, or buyer's door). Each answer narrows down which Incoterm allocates cost and risk the way you've described.
Under Incoterms 2020, cost and risk don't always transfer at the same point — CIF and CFR, for instance, both transfer risk to the buyer once goods are on board the vessel at the origin port, even though the seller keeps paying freight (and, for CIF, insurance) all the way to the destination port. The selector's questions are designed to surface that split rather than assume "who pays" and "who bears risk" are the same thing.
Four terms — FOB, CFR, CIF, and FAS — only apply to sea and inland waterway transport under Incoterms 2020. If your shipment moves by air, road, rail, or multimodal, the suggestion will come from the any-mode group instead: EXW, FCA, CPT, CIP, DAP, DPU, or DDP.
Worked example
Ocean shipment, buyer arranges main carriage and insurance, buyer clears import, delivery point is the origin port
- Primary transport modeOcean
- Who arranges main carriage?Buyer
- Who provides cargo insurance?Buyer
- Who handles import clearance?Buyer
- Delivery pointPort / terminal
Suggested Incoterm: FOB (Free on Board) — risk transfers once goods are on board the vessel at the origin port.
Frequently asked questions
What's the difference between EXW and FOB?
Under EXW (Ex Works), the seller's only obligation is making the goods available at their own premises — in principle, the buyer arranges and pays for everything from there, including export clearance, main carriage, and import. Under FOB (Free on Board), the seller additionally handles export clearance and delivers the goods on board the vessel at the origin port, with the buyer taking over ocean freight, insurance, and import clearance from that point. FOB places meaningfully more obligation on the seller than EXW.
What's the difference between FOB and CIF?
Both transfer risk to the buyer at the same point — once the goods are on board the vessel at the origin port — but they split costs differently. Under FOB, the buyer arranges and pays for ocean freight and insurance onward from the port. Under CIF (Cost, Insurance and Freight), the seller pays for ocean freight and a minimum level of insurance through to the destination port, even though risk has already passed to the buyer earlier at loading.
What does DDP mean, and why is it the maximum seller obligation?
DDP (Delivered Duty Paid) puts the seller on the hook for everything: export clearance, main carriage, import duties, and delivery to the buyer's door, with unloading the only task the buyer might handle if separately agreed. It is common in B2C or turnkey supply arrangements where the buyer wants a single landed price with no customs involvement, but it also means the seller needs import-side expertise (or a broker) in the buyer's country.
Can I use FOB or CIF for an air or road shipment?
No — FOB, CIF, CFR, and FAS are sea and inland-waterway-only terms under Incoterms 2020, defined around a vessel and a port. For air, road, rail, or multimodal shipments, use one of the any-mode terms instead: FCA, CPT, CIP, DAP, DPU, or DDP, which are built around handing goods to a carrier rather than loading a ship.
Why does who arranges insurance change the suggested term?
Incoterms 2020 distinguishes seller-paid-freight terms by whether the seller also insures the cargo. If the seller arranges both freight and insurance to the buyer's door, the tool points toward CIP (or CIF for sea) instead of CPT (or CFR), which cover freight only and leave the buyer to insure the goods in transit. Getting this answer right avoids assuming cargo insurance exists when it doesn't.
Related tools
Estimates & assumptions
- Based on Incoterms 2020.
- This is a simplified five-question decision tree, not a legal opinion — confirm the exact term and named place in your sales contract with your forwarder or legal counsel.
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