Incoterms (International Commercial Terms) define responsibilities between exporters and importers regarding delivery, risk, and costs. These widely-used terms of sale, are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.

The 11 internationally recognized rules that define the responsibilities of sellers and buyers in international trade—known as Incoterms® 2020—are:

Incoterms for Any Mode of Transport (7):

1. EXW – Ex Works

2. FCA – Free Carrier

3. CPT – Carriage Paid To

4. CIP – Carriage and Insurance Paid To

5. DAP – Delivered At Place

6. DPU – Delivered at Place Unloaded

7. DDP – Delivered Duty Paid

Incoterms for Sea and Inland Waterway Transport (4):

1. FAS – Free Alongside Ship

2. FOB – Free On Board

3. CFR – Cost and Freight

4. CIF – Cost, Insurance and Freight

These rules allocate key responsibilities between buyer and seller—such as transport, insurance, customs clearance, cost allocation, and risk transfer—ensuring clarity and reducing misunderstandings in international transactions.

Key 2025 updates emphasize digital documentation and sustainability.

Understanding and applying the right Incoterm protects both parties and ensures clear cost allocation.

 A visual infographic simplifies these terms for quick reference