Picking the right Incoterm decides who pays for carriage and insurance, who clears customs at each end, and the precise moment risk passes from seller to buyer. This selector narrows the eleven Incoterms 2020 rules to a recommendation based on your transport mode and how you want to split responsibility, then shows the full breakdown for any term.
How it works
The eleven rules fall into four groups by how much the seller takes on. The selector filters by transport mode first — sea-only terms (FAS, FOB, CFR, CIF) versus any-mode terms (FCA, CPT, CIP, DAP, DPU, DDP, plus EXW) — then maps your responsibility preference to a term:
- Minimum seller obligation: FOB for sea, FCA for any mode.
- Balanced: CIF for sea, CIP for any mode — seller pays freight, buyer clears import.
- Maximum seller obligation: DDP — seller delivers duty-paid to the door.
For every term the reference shows when risk transfers, the cost split, and who handles export versus import clearance, so you can confirm the fit before contracting.
How it works in practice
Risk and cost do not always move together. Under the C-group terms — CFR, CIF, CPT, CIP — risk passes early (at origin, on loading or hand-off to the carrier) even though the seller keeps paying freight to the destination. That split surprises buyers who assume they are covered until arrival; it is exactly why the detail panel separates the risk-transfer point from the cost responsibilities.
Tips and notes
Match the term to who can realistically perform it: never agree DDP into a country where you cannot clear import, and avoid FOB or CIF for containerised cargo since risk there should pass at the terminal, not the ship’s rail — FCA or CIP fit better. Always pair the term with a named place (“FCA Rotterdam”, “DAP Lagos warehouse”) and state the Incoterms 2020 edition in the contract so both sides reference the same rulebook.