Incoterms 2020: eleven rules, risk and cost transfer Eleven rules, one question.
Incoterms® 2020 are the eleven three-letter rules published by the ICC that define how delivery, risk and cost are split between seller and buyer. Seven of them (EXW, FCA, CPT, CIP, DAP, DPU, DDP) work for any mode of transport; four (FAS, FOB, CFR, CIF) are for sea and inland waterway transport only. The rules do not say when title to the goods passes.
What an Incoterms rule does, and does not do
An Incoterms® rule answers three questions: where the goods are delivered, where risk changes hands and which cost belongs to whom. Each rule is set out in ten seller obligations, A1–A10, and ten buyer obligations, B1–B10.
The rules are not a contract of sale in themselves; they become part of an existing contract by reference. According to the ICC's own list, the rules do not deal with:
- Whether a contract has been concluded at all
- The specifications of the goods and whether they are defective
- The time, place, method and currency of payment
- The consequences of breach and the remedies available
- When title to the goods passes
- The effect of sanctions, embargoes and customs tariffs
That is why reducing a contract to a single delivery-term line is risky. Retention of title, governing law and dispute resolution must be written separately.
Four groups: E, F, C, D
The eleven rules are grouped under four letters in increasing order of what the seller takes on. Knowing the group logic lets you read a rule roughly right even the first time you see it.
- E — Departure
- The seller makes the goods available at its own premises and leaves them there. One rule: EXW.
- F — Main carriage unpaid
- The seller hands the goods to a carrier nominated by the buyer and clears export; the buyer pays the main freight. FCA, FAS, FOB.
- C — Main carriage paid
- The seller pays the main freight but risk passes early, at departure. That is the group's defining feature and its most misunderstood one. CFR, CIF, CPT, CIP.
- D — Arrival
- The seller brings the goods to the place of destination and carries the risk that far. DAP, DPU, DDP.
Under a C rule, "I pay the freight" and "the risk is mine" are not the same thing. If the vessel sinks on a CFR or CIF shipment, the loss is the buyer's even though the seller paid the freight. The buyer's counterparts are the carrier and the insurer, not the seller. The distance between cost transfer and risk transfer is drawn on the cost allocation page.
The eleven rules one by one
EXW — Ex Works
The seller places the goods at the buyer's disposal at its own premises, not loaded on any vehicle and not cleared for export. All risk and cost pass to the buyer from that point. The ICC notes that the rule is essentially suited to domestic trade and points out the difficulties it creates in international sales.
A Türkiye-specific problem: as a rule, a foreign buyer cannot file an export declaration in Türkiye in the capacity of exporter. Even where the contract says EXW, the Turkish exporter in practice has the declaration filed. It thereby carries an obligation, and the customs brokerage cost, that it never took on.
FCA — Free Carrier
The seller delivers the goods to the carrier nominated by the buyer at the named place and completes export clearance. If the named place is the seller's premises, the seller loads the goods onto the buyer's vehicle; if it is anywhere else, the seller delivers on its own vehicle, not unloaded.
In the ICC's decision flowchart this is the F rule to choose when the goods travel in a container or by more than one mode, or when delivery is to an inland or port terminal. Detail: FOB or FCA for containerised cargo.
FAS — Free Alongside Ship
The seller places the goods alongside the vessel at the port of loading, on the quay or a barge, and clears export. Sea and inland waterway only. Used for bulk cargo and for heavy pieces that do not fit into a container.
FOB — Free On Board
The seller loads the goods on board the vessel nominated by the buyer at the port of loading; risk and cost split at exactly that moment. Sea and inland waterway only. The ICC states that FOB suits bulk cargo and conventional general cargo, or cases where the seller itself has the container loaded on board.
CFR — Cost and Freight
The seller pays the freight to the port of destination, but risk passes to the buyer when the goods are loaded on board. There is no insurance obligation. Sea and inland waterway only.
CIF — Cost, Insurance and Freight
In addition to CFR, the seller takes out cargo insurance for the buyer's benefit. Risk still passes at the port of loading. Incoterms® 2020 left the minimum cover for CIF unchanged at Institute Cargo Clauses (C). The parties may agree higher cover in the contract.
CPT — Carriage Paid To
The seller arranges and pays carriage to the named place of destination; risk passes to the buyer when the goods are handed to the first carrier. Any mode. No insurance obligation.
For an exporter selling CPT Hamburg from a factory in Bursa, the first carrier is usually the domestic haulier, so risk passes to the buyer at the factory gate while the seller keeps paying freight all the way to Hamburg.
CIP — Carriage and Insurance Paid To
In addition to CPT, the seller insures the goods; risk again passes on delivery to the first carrier. One of the most important substantive changes in Incoterms® 2020 sits here: the minimum cover the seller must provide under CIP was raised to Institute Cargo Clauses (A), "all risks".
DAP — Delivered at Place
The seller delivers the goods at the place of destination ready for unloading from the arriving vehicle. Unloading is the buyer's. Import clearance and import duties are the buyer's. Any mode. It is today's equivalent of DDU, which was removed in Incoterms® 2010.
DPU — Delivered at Place Unloaded
The seller delivers the goods at the place of destination unloaded from the arriving vehicle. It is the only one of the eleven rules that puts unloading on the seller. It is the renamed DAT of Incoterms® 2010; the name changed because the place of destination no longer has to be a "terminal".
DDP — Delivered Duty Paid
The rule under which the seller takes on the most: it brings the goods to the place of destination, handles export, transit and all import formalities, and pays import duties. Unloading is the buyer's unless the contract of carriage says otherwise.
Caution: most countries require the person filing an import declaration to be established and registered for tax there. A non-resident seller cannot recover import VAT either.
Which rule for which mode of transport
This distinction is the strictest part of the rules and the one most often broken. Four rules — FAS, FOB, CFR, CIF — are for sea and inland waterway transport only, because all four define the delivery point by reference to a vessel.
| Rule | Group | Sea | Road | Air | Rail | Insurance required |
|---|---|---|---|---|---|---|
| EXW | E | ✓ | ✓ | ✓ | ✓ | No |
| FCA | F | ✓ | ✓ | ✓ | ✓ | No |
| FAS | F | ✓ | ✗ | ✗ | ✗ | No |
| FOB | F | ✓ | ✗ | ✗ | ✗ | No |
| CFR | C | ✓ | ✗ | ✗ | ✗ | No |
| CIF | C | ✓ | ✗ | ✗ | ✗ | Yes — ICC (C) |
| CPT | C | ✓ | ✓ | ✓ | ✓ | No |
| CIP | C | ✓ | ✓ | ✓ | ✓ | Yes — ICC (A) |
| DAP | D | ✓ | ✓ | ✓ | ✓ | No |
| DPU | D | ✓ | ✓ | ✓ | ✓ | No |
| DDP | D | ✓ | ✓ | ✓ | ✓ | No |
The "insurance required" column shows the contractual obligation. Under the rules marked "No", the party carrying the risk should still insure in its own interest.
What changed from Incoterms 2010
- DAT was removed, DPU arrived. Renamed to make clear that the place of destination does not have to be a terminal.
- The minimum insurance level under CIP went up. From ICC (C) to ICC (A). The level under CIF did not change.
- Costs were gathered in one article. In 2010 they sat in A6/B6 with some items scattered elsewhere; in 2020 they are all in A9/B9.
- An on-board bill of lading option opened under FCA. The parties may agree that the carrier issues the seller a transport document with an on-board notation, to meet a documentary credit's "on board" requirement.
- Security-related obligations and costs were set out more visibly.
Incoterms 2030: what is known today
As of 24 Oct 2026: the ICC has begun revising the Incoterms® 2020 rules. Its Austrian and Dutch national committees write that, on the current timeline, Incoterms® 2030 is planned for publication in late 2029. That is a plan: the ICC has not announced a fixed publication or entry-into-force date.
No new text has been published. ICC Netherlands states that the working documents of the revision are confidential and will not be reproduced in its communications. Claims that a rule disappears or arrives in Incoterms 2030 therefore have no ICC source today.
The edition in force, and the one to write into the contract, is Incoterms® 2020, with the year every time. When the year is in the contract, it stays clear which text applies after a new edition comes out. When it is left out, the ICC introduction warns that this can cause problems that are hard to resolve.
Has DDP been abolished? No. No rule has been withdrawn from Incoterms® 2020: all eleven, DDP included, are part of Incoterms® 2020 and can be used. What DDP requires when you sell into the European Union is covered in DDP sales to the EU.
Adding words to a rule: EXW Loaded, FOB Stowed, DDP VAT unpaid
Contracts often carry words added after the rule: EXW Loaded (the seller loads), FOB Stowed (stowage included), DDP VAT unpaid (import VAT excluded). The ICC does not prohibit this. According to the introduction to Incoterms® 2020, the rules do not forbid altering a rule, but doing so carries risks, and the parties must spell out the intended effect very clearly in their contract (paragraph 78).
The question to settle is whether the addition moves cost only, or the delivery point and risk as well. The introduction asks the parties who change the cost split to state clearly whether they also mean to change the point of delivery and of risk transfer. EXW Loaded on its own does not answer that: under the ICC's explanatory note to EXW, delivery and risk transfer happen when the goods are placed at the buyer's disposal, not when they are loaded. If the seller is going to load, who bears loss or damage during loading should be agreed in advance.
Rule + exact place + year + one sentence that says what the addition does. Example: EXW [full address of the seller's warehouse] Incoterms® 2020; the seller loads the goods onto the buyer's vehicle at its own cost and bears the risk of loss or damage until loading is complete. The second sentence does the work: without it, the word Loaded leaves risk open.
If the addition pulls against the rule itself, another rule may fit better. The ICC suggests that a buyer who does not want loading risk at the seller's premises consider FCA, where the seller loads (FOB or FCA for containers), and that a seller who cannot obtain import clearance consider DAP or DPU instead of DDP. Which cost item each rule gives to whom is in the Incoterms cost allocation table.
When it goes wrong
The rule + place + version triple is written incomplete
"FOB İzmir" is not enough. If the version is missing, one party may rely on 2010 and the other on 2020, and disputes appear on points such as DPU/DAT and the CIP insurance level.
The right way: "FCA Ambarlı Port, İstanbul, Incoterms® 2020".
The FCA delivery place is left vague
A wording like "FCA İstanbul" leaves the loading obligation open: at the seller's premises the seller loads, at a terminal the seller does not unload. When the place is not written in full, who hires the forklift, who pays waiting time and who pays the empty container return stay in dispute.
Transit damage under a C rule is pushed back onto the seller
Because the seller paid the carriage, the buyer tries to lay damage suffered in transit on the seller. But risk has long passed; the buyer's counterparts are the carrier and the insurer. One of the most frequent loss items seen in operations.
DAT or DDU still written in 2026
DAT became DPU in Incoterms® 2020. DDU was removed in Incoterms® 2010 and its equivalent is DAP. CNF and C&F were never Incoterms® rules; what is meant is CFR. These terms still appear in contracts and declarations.
Frequently asked
Are Incoterms 2030 coming?
Yes, work has started. In its Global Policy Commissions Workplan 2026, published in January 2026, the ICC announced that it would begin revising the Incoterms® rules and named the target version Incoterms® 2030.
There is no fixed date: on the timeline reported by ICC national committees, publication is planned for late 2029; the ICC has not announced a publication or entry-into-force date. The only version in force today is Incoterms® 2020; keep writing that one into your contracts.
On the ICC's revision history page, 1923 and 1928 are two studies of trade terms; the first version of the rules was published in 1936. Later versions followed in 1953, 1967, 1974, 1980, 1990, 2000, 2010 and 2020. The gap between versions has ranged from 6 to 17 years; there is no commitment to a fixed ten-year cycle.
Which rule is used most?
We cannot answer that with a verified statistic: we found no reliable, citable Turkish data on how often each rule is used. The percentages that circulate in the trade have no source.
The tendency we see in practice: Turkish exporters mostly work with FOB and CIF, importers with EXW and FCA. But the right rule is not the "most used" one; it is the one that fits your shipment.
Does an Incoterms rule bind the carrier?
No. Incoterms® rules govern the sale relationship between seller and buyer; they do not bind the carrier and do not replace the contract of carriage.
The carrier's liability is set by separate regimes (CMR, Hague-Visby, Montreal, COTIF-CIM) and by the terms of the transport document. "I sold DAP, so the carrier should pay for the damage" does not work for that reason.
Sources
- ICC — Incoterms® 2020 official page Entry into force and scope · iccwbo.org · accessed 1 Sep 2026
- ICC — Incoterms® rules revision history List of versions from 1936 to date · iccwbo.org · accessed 1 Sep 2026
- ICC — Incoterms® 2020 Checklist and Flowcharts The ICC's own decision flowchart: FCA for containerised or multimodal transport, FOB for general or bulk cargo loaded on board in the conventional way; "all risks" (LMA/IUA Clauses A) cover under CIP · ICC Publication No. 817E, ISBN 978-92-842-0626-1, © 2022 · library.iccwbo.org (PDF, free) · accessed 1 Sep 2026
- ICC — Incoterms® 2020 Introduction (Publication No. 723E) Scope of the rules and the matters they do not deal with. The introduction is signed by Charles Debattista (ICC Special Adviser, Incoterms® 2020 Drafting Group); by its own note the views are the author's and not part of the rules · icc-switzerland.ch (free from ICC Switzerland) · accessed 1 Sep 2026
- ICC — Incoterms® trademark and copyright policy The explanations on this page are our own words, not quotations from the ICC text · iccwbo.org · accessed 1 Sep 2026
- UTİKAD — Incoterms 2020 circular (13 Jan 2020, No. 2020/009) The DAT→DPU change and the clarification under FCA · utikad.org.tr · accessed 1 Sep 2026
- UNCITRAL — CISG (Contracts for the International Sale of Goods) Passing of title and validity of the contract outside its scope; Türkiye a party since 1 Aug 2011 · uncitral.un.org · accessed 1 Sep 2026
- ICC — Global Policy Commissions Workplan 2026 Launch of the revision of the Incoterms® rules and the target name Incoterms® 2030 (p. 5) · iccwbo.org (PDF) · accessed 29 Sep 2026
- ICC Austria — Incoterms® 2030 The new edition is under development; on the current timeline publication is planned for late 2029; until then Incoterms® 2020 applies · icc-austria.org · accessed 24 Oct 2026
- ICC Netherlands — Incoterms® 2030: a Dutch Working Group is being formed (31 Aug 2026) The revision has begun; the final launch of Incoterms® 2030 is planned for late 2029; the working documents of the revision are confidential · iccwbo.nl · accessed 24 Oct 2026
- ICC — Incoterms® 2020 Introduction, paragraphs 9–11 and 78 Rule + place + year, and the risk of leaving the year out (paragraphs 9–11); when a rule is altered, its effect must be made clear, and a change in costs must say whether delivery and risk move too (paragraph 78) · icc-switzerland.ch · accessed 24 Oct 2026
- ICC Digital Library — Incoterms® 2020, rules for any mode of transport Explanatory note 5 to EXW (loading risk; FCA as the alternative), explanatory note 7 to DDP (DAP or DPU if the seller cannot obtain import clearance); DDP is one of the eleven rules · library.iccwbo.org · accessed 24 Oct 2026
This page is for information only and is not legal or customs advice. The binding source of the rule texts is the ICC's own publication; the explanations here are summary and interpretation. Consult your customs broker and legal adviser before taking a binding decision. Incoterms® is a registered trademark of the ICC.
Change log
- Correction: the FAQ answer on Incoterms 2030 now gives the late-2029 timeline reported by ICC national committees; "as a rule" was added to the sentence saying a foreign buyer cannot file the export declaration, because Customs Law art. 62 states this as a rule with exceptions.
- Two sections added: Incoterms 2030 as of 24 Oct 2026 (planned for late 2029 according to ICC Austria and ICC Netherlands; no text published; Incoterms® 2020 remains the edition to use) and adding words to a rule (ICC introduction, paragraph 78; explanatory notes to EXW and DDP). Four sources added.
- Correction: the revision history counted 1923 and 1928 as versions; on the ICC's own page they are two studies, and the first version dates from 1936. The gap between versions is 6 to 17 years, not "5 to 17". The ICC Workplan 2026, on which the Incoterms® 2030 information rests, was added to the sources.
- Page published as the English counterpart of the Turkish page of 1 Sep 2026. Basis: ICC Incoterms® 2020. Per the ICC's January 2026 Workplan the Incoterms® 2030 revision has begun; no publication date has been announced.