Smart Logistics

Incoterms 2020 Guide

One trade term decides who pays freight, insurance and customs, and where risk passes. Compare all 11 rules in a single table, then check your expected cost in the calculator.

Rule	Delivery / risk transfer	Main carriage	Insurance duty	Export clearance	Import clearance	Transport mode
Group E · departure
EXW Ex Works The buyer must handle export clearance. Overseas buyers rarely can file a Korean export declaration, so FCA is the practical choice. See my cost in the FCL/LCL calculator	When goods are made available at the seller's premises	Buyer	No obligation	Buyer	Buyer	Any mode
Group F · main carriage unpaid by seller
FCA Free Carrier Best fit for containers, air and multimodal shipments. Since 2020 the parties may agree on an on-board bill of lading.	When handed to the buyer's carrier at the named place	Buyer	No obligation	Seller	Buyer	Any mode
FAS Free Alongside Ship For bulk or heavy cargo loaded from the quay. Do not use it for containerised cargo.	When placed alongside the vessel at the port of shipment	Buyer	No obligation	Seller	Buyer	Sea and inland waterway only
FOB Free On Board The most common term for Korean exports. The seller delivers on board at Busan; ocean freight and insurance from there are on the buyer. See my cost in the FCL/LCL calculator	When loaded on board the vessel at the port of shipment	Buyer	No obligation	Seller	Buyer	Sea and inland waterway only
Group C · main carriage paid by seller (risk passes at origin)
CFR Cost and Freight The seller pays ocean freight to the destination port, but risk already passed at loading. The buyer should arrange its own insurance. See my cost in the FCL/LCL calculator	When loaded on board the vessel at the port of shipment	Seller	No obligation	Seller	Buyer	Sea and inland waterway only
CIF Cost, Insurance and Freight CFR plus minimum-cover insurance (ICC(C)) bought by the seller. Specify wider cover in the contract if you need it. See my cost in the FCL/LCL calculator	When loaded on board the vessel at the port of shipment	Seller	Seller	Seller	Buyer	Sea and inland waterway only
CPT Carriage Paid To The multimodal version of CFR. Use CPT instead of CFR whenever air or inland legs are involved.	When handed to the buyer's carrier at the named place	Seller	No obligation	Seller	Buyer	Any mode
CIP Carriage and Insurance Paid To Since 2020 the seller must buy all-risks cover (ICC(A)), so insurance is broader than under CIF.	When handed to the buyer's carrier at the named place	Seller	Seller	Seller	Buyer	Any mode
Group D · arrival
DAP Delivered at Place The seller brings the goods to the buyer's door, but import clearance, duties and unloading stay with the buyer. See my cost in the FCL/LCL calculator	On the arriving vehicle at the named destination, before unloading	Seller	No obligation	Seller	Buyer	Any mode
DPU Delivered at Place Unloaded The only rule where the seller also unloads (formerly DAT). Suits warehouse or terminal delivery.	Once unloaded at the named destination	Seller	No obligation	Seller	Buyer	Any mode
DDP Delivered Duty Paid The seller covers import clearance and duties too. It needs importer-of-record status in the destination country, so check the US and EU rules first. See my cost in the FCL/LCL calculator	On the arriving vehicle at the named destination, before unloading	Seller	No obligation	Seller	Seller	Any mode

Group E · departure

EXWEx Works

Any mode

Delivery / risk transfer: When goods are made available at the seller's premises
Main carriage: Buyer
Insurance duty: No obligation
Export clearance: Buyer
Import clearance: Buyer

The buyer must handle export clearance. Overseas buyers rarely can file a Korean export declaration, so FCA is the practical choice.

See my cost in the FCL/LCL calculator

Group F · main carriage unpaid by seller

FCAFree Carrier

Any mode

Delivery / risk transfer: When handed to the buyer's carrier at the named place
Main carriage: Buyer
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

Best fit for containers, air and multimodal shipments. Since 2020 the parties may agree on an on-board bill of lading.

FASFree Alongside Ship

Sea and inland waterway only

Delivery / risk transfer: When placed alongside the vessel at the port of shipment
Main carriage: Buyer
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

For bulk or heavy cargo loaded from the quay. Do not use it for containerised cargo.

FOBFree On Board

Sea and inland waterway only

Delivery / risk transfer: When loaded on board the vessel at the port of shipment
Main carriage: Buyer
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

The most common term for Korean exports. The seller delivers on board at Busan; ocean freight and insurance from there are on the buyer.

See my cost in the FCL/LCL calculator

Group C · main carriage paid by seller (risk passes at origin)

CFRCost and Freight

Sea and inland waterway only

Delivery / risk transfer: When loaded on board the vessel at the port of shipment
Main carriage: Seller
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

The seller pays ocean freight to the destination port, but risk already passed at loading. The buyer should arrange its own insurance.

See my cost in the FCL/LCL calculator

CIFCost, Insurance and Freight

Sea and inland waterway only

Delivery / risk transfer: When loaded on board the vessel at the port of shipment
Main carriage: Seller
Insurance duty: Seller
Export clearance: Seller
Import clearance: Buyer

CFR plus minimum-cover insurance (ICC(C)) bought by the seller. Specify wider cover in the contract if you need it.

See my cost in the FCL/LCL calculator

CPTCarriage Paid To

Any mode

Delivery / risk transfer: When handed to the buyer's carrier at the named place
Main carriage: Seller
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

The multimodal version of CFR. Use CPT instead of CFR whenever air or inland legs are involved.

CIPCarriage and Insurance Paid To

Any mode

Delivery / risk transfer: When handed to the buyer's carrier at the named place
Main carriage: Seller
Insurance duty: Seller
Export clearance: Seller
Import clearance: Buyer

Since 2020 the seller must buy all-risks cover (ICC(A)), so insurance is broader than under CIF.

Group D · arrival

DAPDelivered at Place

Any mode

Delivery / risk transfer: On the arriving vehicle at the named destination, before unloading
Main carriage: Seller
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

The seller brings the goods to the buyer's door, but import clearance, duties and unloading stay with the buyer.

See my cost in the FCL/LCL calculator

DPUDelivered at Place Unloaded

Any mode

Delivery / risk transfer: Once unloaded at the named destination
Main carriage: Seller
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Buyer

The only rule where the seller also unloads (formerly DAT). Suits warehouse or terminal delivery.

DDPDelivered Duty Paid

Any mode

Delivery / risk transfer: On the arriving vehicle at the named destination, before unloading
Main carriage: Seller
Insurance duty: No obligation
Export clearance: Seller
Import clearance: Seller

The seller covers import clearance and duties too. It needs importer-of-record status in the destination country, so check the US and EU rules first.

See my cost in the FCL/LCL calculator

The calculator splits costs for six rules: EXW, FOB, CFR, CIF, DAP and DDP.

Which rule should I choose?

New to exporting? Use FOB (sea) or FCA (air, containers). The seller's duties end at origin, which keeps costs predictable.
If the buyer wants a delivered-to-door price, use DAP. Duties stay with the buyer, so you avoid destination-country red tape.
DDP looks convenient, but import clearance and taxes fall on the seller. Always consult before quoting DDP to the US or EU.

Use it in the CI/PL builder Request a freight quote

This table summarises the ICC Incoterms® 2020 rules for reference only. The official ICC text and your sales contract prevail; check the contract terms before shipping.