Incoterms 2020 · ICC

Incoterms 2020 risk transfer finder

Know exactly where the risk passes before the goods leave the seller.

Pick the Incoterm on your contract to see where risk and cost transfer, who books the freight, who insures, and who clears customs at each end.

Last updated 2026-09-28. Math runs in your browser, no data leaves your computer.

Pick the three letter rule written on the contract or proforma, next to the named place. Every line in the answer comes from ICC's free material on Incoterms 2020, because the rules themselves are sold by ICC.

Four rules, FAS, FOB, CFR and CIF, are for sea and inland waterway only, so pick one of the other seven for air, road, rail or container shipments that change hands at a terminal.

Before the booking, screen the name on the invoice. Shipment pre-check is on the paid plans, from USD 59 a month.

General guidance only. Verify against the cited primary sources before you commit to a shipment, declaration, or contract.

Where risk passes under all 11 rules

The table below is the short version of the answer above, one line per rule. The customs columns follow ICC's guidance note on tariff risk, which lists export clearance, import clearance and the tariff for every rule.

Rule Risk passes Main carriage Export Import and duty
EXW At the named place, usually the seller's premises, once the goods are at the buyer's disposal and ready for loading onto the buyer's collecting vehicle. Buyer Buyer Buyer
FCA At the named place when the goods are handed to the carrier or person the buyer nominated. Buyer Seller Buyer
FAS When the goods are placed alongside the vessel the buyer nominated at the named port of shipment. Buyer Seller Buyer
FOB When the goods are loaded on board the vessel the buyer nominated at the named port of shipment. Buyer Seller Buyer
CFR When the goods are loaded on board the vessel at the port of shipment, not at the named destination port. Seller Seller Buyer
CIF When the goods are loaded on board the vessel at the port of shipment, not at the named destination port. Seller Seller Buyer
CPT When the seller hands the goods to the carrier it contracted, at the agreed place of delivery, usually where the journey starts. Seller Seller Buyer
CIP When the seller hands the goods to the carrier it contracted, at the agreed place of delivery, usually where the journey starts. Seller Seller Buyer
DAP At the named place of destination, when the goods are at the buyer's disposal on the arriving vehicle, ready for unloading. Seller Seller Buyer
DPU At the named place of destination, once the seller has unloaded the goods from the arriving vehicle and placed them at the buyer's disposal. Seller Seller Buyer
DDP At the named place of destination, when the goods are at the buyer's disposal on the arriving vehicle, ready for unloading. Seller Seller Seller

Insurance is an obligation under only two rules. CIF keeps the Institute Cargo Clauses (C) as the default, and CIP now requires cover in line with Institute Cargo Clauses (A), as ICC's Incoterms 2020 page explains. Under the other nine, the party carrying the risk decides whether to insure.

Worked example. A CFR buyer who thought the seller carried the sea risk

The booking. A buyer agrees CFR at its own port of destination, the seller books and pays the ocean freight, and the buyer assumes that because the seller is paying for the voyage the cargo is the seller's problem until it arrives. No marine cover is bought on either side, which looks fine on paper.

The failure. Containers are lost overboard mid voyage. Under CFR the risk passed to the buyer when the goods were loaded on board at the port of shipment, so the loss is the buyer's, the seller has been paid in full, and there is no policy to claim on. The choice is the usual one: carry the risk uninsured, or change the term.

The fix. On the next contract the buyer either takes out its own cargo cover from the port of shipment under CFR, or moves to CIF with the clauses it needs written in. Either way a policy is in place from the moment the risk passes, and the next shipment sails covered.

Need to turn an FOB price into a CIF quote with the insured value worked out? The FOB to CIF calculator solves the premium inside the price.

Frequently asked

When does risk transfer under Incoterms 2020?

At the point of delivery each rule defines. Under EXW, FCA, FAS and FOB it is at or near the start of the journey, under the four C rules it is when the goods are handed to the first carrier or loaded on board at shipment, and under DAP, DPU and DDP it is at the named destination. ICC Academy's C rules versus D rules article walks through the split.

Under CIF, why does the buyer carry the risk at sea when the seller pays freight?

Because CIF separates cost from risk. The seller pays freight and insurance to the destination port, but delivery, and with it the risk, happens when the goods are loaded on board at the port of shipment. The seller's insurance is there so the buyer can claim directly from the insurer if the goods are lost on the way.

Which Incoterms rule makes the seller pay import duty?

Only DDP. ICC's own guidance note on tariff risk puts it plainly: under every other rule the buyer bears the import burden, including any change in the tariff schedule. Under EXW the buyer also handles export clearance, and under the other nine rules the seller does.

Can I use FOB for container shipments?

You can, but ICC trainers point to FCA as the better fit. Containers are normally handed to the carrier at a terminal and can sit there for days before they are loaded, and under FOB the seller still carries the risk until the goods are on board.

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Sourzi shows what official files say. It is not customs or legal advice. For a binding answer, ask a licensed customs broker, a CBP ruling or an Australian Border Force Tariff Advice.

File dates and links are on Data sources.