Incoterms Incoterms | Shipit.fi | Shipit

Incoterms refers to internationally recognized delivery terms. By referencing them, the seller and buyer agree in commercial deliveries who is responsible for the goods during delivery and transport and at what stage the responsibility transfers.

With Incoterms delivery terms, the seller and buyer aim to avoid unnecessary misunderstandings. Incoterms are created and updated by the International Chamber of Commerce (ICC), which holds all rights to their commercial publication. The latest version is Incoterms 2020. More information is available at ICC website. Shipit is responsible for the content of this summary.

Terms suitable for all modes of transport Incoterms 2020:

EXW – Ex Works – Collected from sender's designated location.

The EXW seller must package the shipment correctly. Responsibility transfers to the buyer when their designated carrier collects the package from the seller's designated location. The seller also determines when the shipment is available for collection, the buyer is responsible for loading. The buyer is responsible for insuring the goods. The buyer is also responsible for loading the goods. Export and import obligations are also the buyer's responsibility.

EXW is commonly used for domestic shipments, while FCA is a good option for international shipments. EXW vs FCA differs in who handles the loading and export clearance. Under EXW the seller is not responsible for export clearance or loading, so it's better to use FCA unless the buyer can easily handle export clearance themselves and get permission to handle loading on behalf of the seller.


FCA – Free Carrier (E.g. FCA Helsinki) – Free Carrier.

The parties must agree precisely where the goods are to be collected from, e.g. the seller's warehouse address. The seller is responsible for the goods until they are loaded onto the carrier ordered by the buyer.

Seller's responsibility:

  • Packaging the goods

  • Export clearance and formalities

  • Loading (only if collection is from seller's premises, if seller delivers the shipment to carrier's terminal responsibility transfers to buyer when goods are unloaded at carrier's terminal)

Buyer's responsibility:

  • Inspecting the goods

  • Responsibility for goods transfers to buyer from collection point

  • Delivery charges

  • Insurance

  • Import clearance, formalities and related costs

  • Unloading shipment

CPT – Carriage Paid To (E.g. CPT Mariehamn) – Carriage paid to.

In this option, parties must agree precisely where the seller's responsibility for transport costs ends. The agreement should also mention unloading of goods.

Seller's responsibility:

  • Packaging the goods

  • Responsibility for goods until agreed loading point and loading the goods

  • Export clearance and formalities

  • Delivery costs to agreed destination

Buyer's responsibility:

  • Inspecting the goods

  • Goods are buyer's responsibility already when carrier collects goods from seller

  • Delivery charges from agreed destination onwards

  • Insurance

  • Import clearance, formalities and related costs

  • Unloading shipment

CIP – Carriage and Insurance Paid (E.g. CIP Turku) – Carriage and insurance paid.

Same as CPT, but the seller is responsible for insuring the shipment to the agreed destination, from where the buyer arranges and insures onward transport. The seller only needs to insure goods to minimum, so additional insurance is buyer's responsibility. Responsibility for goods transfers to buyer already at collection.

This delivery term and transfer of responsibility can be modified by the parties.

DPU (E.g. DPU Savonlinna) – Delivered At Place unloaded – Delivered unloaded from vehicle at agreed terminal. (Replaced DAT delivery term)

Seller's responsibility:

  • Packaging the goods

  • Export clearance and formalities

  • Loading

  • Delivery costs to agreed terminal (if possible, contract should specify exact terminal location where goods are delivered)

  • Unloading goods at agreed terminal

  • Responsibility for goods until delivery

Buyer's Responsibility:

  • Inspecting the goods

  • Delivery charge and responsibility after unloading from agreed terminal to final destination

  • Insurance

  • Import clearance, formalities and related costs

DAP (E.g. DAP Oulu) – Delivered At Place – Delivered to place


Seller's responsibility:

  • Packaging the goods

  • Export clearance and formalities

  • Loading

  • Delivery costs to agreed destination (destination must be agreed as precisely as possible)

  • Unloading goods at agreed destination

Buyer's responsibility:

  • Inspecting the goods

  • Insurance

  • Import clearance, formalities and related costs

DDP (E.g. DDP Rovaniemi) – Delivered Duty Paid – Delivered duty paid

Seller's responsibility:

  • Packaging the goods

  • Export clearance and formalities

  • Loading

  • Delivery costs to agreed destination

  • Import clearance and formalities (Import clearance includes customs clearance and taxes at destination)

DDP should not be used unless the seller can easily arrange import clearance for the goods. This can be agreed so that the seller is responsible for costs incurred by the buyer for doing this.

Buyer's responsibility:

  • Inspecting the goods

  • Insurance

  • Unloading shipment

Terms suitable only for sea transport Incoterms 2010:

FAS (E.g. FAS Hanko) – Free Alongside Ship – Free alongside ship

Seller's Responsibility:

  • Packaging the goods

  • Delivering goods next to vessel/to loading area designated for vessel chosen by buyer

  • Export clearance and formalities

Buyer's responsibility:

  • Inspecting the goods

  • Loading goods at agreed port

  • Transport costs

  • Responsibility transfers to buyer when seller has delivered goods to agreed loading area when vessel has arrived at port

  • Insurance

  • Import clearance and formalities

  • Unloading

FOB (E.g. FOB Kemi) – Free On Board – Free on board

Not suitable for container transport. If container transport, FCA should be used as delivery term.

Seller's responsibility:

  • Packaging goods

  • Export clearance and formalities

  • Loading goods onto ship at agreed port

Seller must be able to prove loading onto ship if needed, which seller gets from carrier.

Buyer's responsibility:

  • Inspecting goods

  • Responsibility transfers to buyer when goods are loaded onto vessel at departure port at agreed delivery time

  • Transport costs from departure port onwards

  • Insurance

  • Import clearance and formalities

  • Unloading

CFR (E.g. CFR Hamina) – Cost and Freight – Costs and freight paid

Seller's responsibility:

  • Packaging goods

  • Export clearance and formalities

  • Loading shipment onto vessel at agreed port

  • Transport costs to agreed port at destination

Buyer's responsibility:

  • Inspecting goods

  • Responsibility already from departure port when seller has loaded goods onto vessel

  • Insurance

  • Import clearance, formalities and related costs

  • Unloading

CIF (E.g. CIF Kotka) – Cost, Insurance and Freight – Cost, insurance and freight paid

For container transport, CIP should be chosen as delivery term

Seller's responsibility:

  • Packaging goods

  • Export clearance and formalities

  • Loading goods onto vessel at agreed port at agreed time

  • Transport costs to agreed port and location there

  • Insurance on behalf of buyer for duration of transport until agreed port

Buyer's responsibility:

  • Inspecting goods

  • Responsibility for shipment already from departure port when goods loaded onto vessel

  • Import clearance, formalities and related costs

  • Unloading