Incoterms 2020

Incoterms 2020 calculator

Pick an Incoterm and see who pays for what. The matrix shows 12 logistics steps from seller premises to buyer door, marked B (buyer) or S (seller) for each of the 11 Incoterms 2020 codes. Risk-transfer point and a practitioner note are surfaced for the picked term.

Last updated 2026-05-09. Math runs in your browser, no data leaves your computer.

General guidance only, not legal or professional engineering advice. Verify against the cited primary sources (IMDG, REACH, ChAFTA, RCEP, Customs Tariff Act, supplier SDS, etc.) before committing to a shipment, declaration, or contract. Sourzi assumes no liability for outcomes based on these calculators.

Risk transfers

Practitioner note

Obligation matrix

B = Buyer responsibility, S = Seller responsibility. Highlighted column is the picked term.

Task	EXW	FCA	CPT	CIP	DAP	DPU	DDP	FAS	FOB	CFR	CIF
Pack and mark goods at the seller premises	S	S	S	S	S	S	S	S	S	S	S
Loading at seller premises onto buyer vehicle	B	S	S	S	S	S	S	S	S	S	S
Inland trucking (origin) to port or terminal	B	S	S	S	S	S	S	S	S	S	S
Export customs clearance	B	S	S	S	S	S	S	S	S	S	S
Origin port handling (THC, BL, seal)	B	B	S	S	S	S	S	S	S	S	S
Loading onto vessel (FAS = alongside, FOB = on board)	B	B	S	S	S	S	S	B	S	S	S
Main carriage (ocean freight or equivalent)	B	B	S	S	S	S	S	B	B	S	S
Marine insurance during main carriage	B	B	B	S	B	B	B	B	B	B	S
Destination port handling (discharge, THC)	B	B	B	B	S	S	S	B	B	B	B
Import customs clearance and duty	B	B	B	B	B	B	S	B	B	B	B
Destination terminal unloading (DPU only)	B	B	B	B	B	S	B	B	B	B	B
Inland trucking (destination) to buyer site	B	B	B	B	B	B	B	B	B	B	B

Why the Incoterm choice matters as much as the price

Incoterms 2020 (the eleventh edition of the International Chamber of Commerce trade-term rulebook) defines three things every commercial sale needs: who pays for what segment of the logistics chain, when risk transfers from seller to buyer, and what each side is contractually obliged to do. A 1,420 USD per tonne FOB Shanghai price is not the same as 1,420 USD per tonne CIF Houston; the FOB price strips out the ocean freight, marine insurance, and destination handling. Quoting EXW vs FCA out of China is not a trivial difference; one of them puts an export-clearance obligation on the buyer that the buyer cannot legally fulfil.

For containerised sea freight from China, FOB is the standard quote. The buyer controls the carrier choice, the routing, the marine insurance carrier, and the destination broker. The seller handles factory loading, inland trucking, export clearance, and the origin port handling. Risk transfers when the goods cross the rail of the vessel at the origin port. The 2020 revision tightened the language to "on board" the vessel, which closed an old debate about cargo damaged on the gantry.

CFR and CIF shift the main-carriage cost to the seller. The buyer no longer books the carrier; the seller passes through the freight cost in the line price. Risk still transfers at the FOB point (rail of the vessel at origin), so even though the seller pays the freight, a vessel sinking is still the buyer claim. CIF adds insurance, but the default cover (Clause C) is narrow; chemical buyers usually need Clause A. The fix is to spec Clause A explicitly in the contract or use CIP (which the 2020 rules force to Clause A by default).

DAP, DPU, and DDP are the seller-deeper terms. DAP delivers to a named destination ready to be unloaded; the buyer pays import duty and unloads. DPU is the same but seller unloads. DDP is the heaviest; seller pays everything including import duty. DDP out of China is often impractical for US imports because the seller cannot legally clear customs in the US (the buyer is the importer of record and the customs bond is in the buyer name). Avoid DDP out of China unless your seller has a US legal entity.

For air freight or courier, FOB and CIF do not apply (those terms are sea-only). The right picks are FCA (most-flexible), CPT (seller pays carriage), or CIP (seller pays carriage and insurance). For multimodal cargo (rail to ship to truck), the same three apply.

Worked example. EXW vs FOB on a 25-tonne caustic soda shipment

The booking. A US distributor asks a Shandong supplier for 25 tonnes of caustic soda 50 percent solution. Supplier offers EXW factory at 410 USD per tonne, or FOB Qingdao at 460 USD per tonne. Distributor thinks EXW is the cheaper deal: 25 x 50 = 1,250 USD savings. Looks fine on paper.

The failure. Distributor accepts EXW. Distributor finds out that under EXW the buyer is responsible for export clearance from China, which the buyer (a US company) cannot legally complete. The distributor has to hire a Chinese freight forwarder anyway, who charges 800 USD for the export declaration plus 1,800 RMB inland trucking plus 1,300 RMB origin port handling, total roughly 1,250 USD. The supposed EXW saving disappears, plus the buyer now carries paper-trail liability if the export declaration is wrong (as the importer-of-record in customs eyes). Either the buyer eats the liability or the buyer asks the seller to amend to FCA, which the seller will not without a price reset.

The fix. On the next quote round, distributor asks for FOB Qingdao directly. 460 USD per tonne, no export-clearance liability, all the origin handling in the seller scope. The price math is the same as EXW plus origin charges, but the contract structure is clean: the seller stays the importer of record at origin, the buyer stays the importer of record at destination, and the export declaration paper trail belongs to the seller. The 50 USD per tonne premium is the cost of the right Incoterm, not a markup. Distributor signs at FOB and the cargo clears in 23 days end to end with no paper-trail tail.

Frequently asked

Which Incoterm should I quote out of China?

For containerised sea freight, the default is FOB (Free On Board). Buyer controls the carrier and the freight rate; seller handles the export clearance and the origin port handling. EXW (Ex Works) is rarely right out of China because the buyer cannot legally complete export clearance themselves. CIF and CFR are reasonable when the buyer wants the seller to book the carrier.

What changed between Incoterms 2010 and Incoterms 2020?

Four substantive changes. (1) DAT was renamed DPU and the place is no longer required to be a terminal. (2) FCA gained an option for the carrier to issue an on-board BL when the buyer requires it for LC document compliance. (3) CIP minimum insurance cover lifted from Clause C (basic) to Clause A (all-risks). (4) The rules now explicitly cover seller-arranged transport on the seller own vehicles.

Where does risk transfer under FOB?

When the goods are loaded onto the vessel at the named port of shipment. Before that moment, risk is on the seller; after, it is on the buyer. The 2020 rules clarified that the moment is when the goods are "on board" the vessel (the cargo crossing the rail of the ship is the historical short-hand).

Can the same Incoterm work for sea freight and air freight?

EXW, FCA, CPT, CIP, DAP, DPU, DDP work for any mode (containerised sea, air, road, rail, multimodal). FAS, FOB, CFR, CIF work only for sea freight where the cargo physically loads onto a vessel. For air or courier, switch to FCA or CPT.

Why is CIF insurance cover often considered inadequate?

The default CIF insurance under the 2020 rules is Institute Cargo Clause C, which covers a narrow set of named perils (fire, vessel sinking, jettison). Most chemical buyers want Clause A cover (all risks) for the same shipment. Either upgrade the CIF clause to Clause A explicitly in the contract, or switch to CIP (where the 2020 rules require Clause A cover by default).