Incoterms 2020 Guide

30 March 2026

This month, we turn the spotlight once again on a key logistics topic: Incoterms. A great deal depends on these terms, and they apply to every shipment. They can help reduce transport costs and clearly set out who bears the risk during transit. In this article, we explain why it is particularly important for you, as the shipper, to have a solid grasp of Incoterms 2020.

Why Incoterms?

International Commercial Terms, or Incoterms, were first introduced in 1936 by the International Chamber of Commerce (ICC). They are reviewed every ten years. The current global standard is the 2020 version, which comprises eleven terms used in both domestic and international goods transport.

Each term defines what the buyer and seller are responsible for. Choosing the right terms brings both clarity and practical advantages. By agreeing expectations in advance with your partners, you can avoid disputes over damage or errors arising during transport.

Make sure you’re properly informed

Since January 2026, Ritra Cargo has been a member of Evofenedex, a leading knowledge hub for trade and logistics. The organisation receives around 1,000 enquiries on this topic each year, which underlines how complex many businesses still find it. We encourage you to take control and build a solid understanding yourself.

It is worth noting that Incoterms govern only transport-related arrangements. Aspects such as rates, payment terms, credit arrangements, or non-performance are not covered  and must be set out separately in a sales contract.

Incoterms 2020: key differences at a glance

Below is a concise overview of what distinguishes each term. We hope this helps you select the most appropriate Incoterm in future.

Terms applicable to all< modes of transport:

EXW – Ex Works The seller makes the goods available at their premises; from that point, the buyer assumes all costs and risks.

FCA – Free Carrier The seller delivers the goods to a carrier nominated by the buyer; risk transfers at the agreed location.

CPT – Carriage Paid To The seller pays for transport to the named destination; risk transfers once the goods are handed to the carrier.

CIP – Carriage and Insurance Paid To As with CPT, but the seller also arranges insurance.

DAP – Delivered at Place The seller delivers the goods, ready for unloading, at the named place; the buyer assumes risk on arrival.

DPU – Delivered at Place Unloaded The seller delivers and unloads the goods at the named place; risk transfers after unloading.

DDP – Delivered Duty Paid The seller bears all costs and risks, including import duties, until the goods reach the buyer.

Terms for sea and inland waterway transport only:

FAS – Free Alongside Ship The seller delivers the goods alongside the vessel; risk transfers at the quay.

FOB – Free On Board The seller loads the goods onto the vessel; risk transfers once the goods are on board.

CFR – Cost and FreightThe seller pays for transport to the port of destination; risk transfers once the goods are on board.

CIF – Cost, Insurance and Freight As with CFR, but the seller also arranges insurance.

* TIP! A free app is available via the International Chamber of Commerce (ICC) website, giving you a handy overview at any time.

Further information

You can find additional resources on this topic here:

Incoterms® explained: everything you need to know and more | KVK

Incoterms 2020 | ICC WBO Netherlands

New Incoterms 2020 from 1 January | Freight forwarder Ritra Cargo

Do you have any questions about Incoterms2020? Please feel free to get in touch. You can reach us by phone on 010 7671000 or by email at sales@ritra.nl.

Looking to broaden your logistics expertise? Our newsletter regularly shares practical insights on a wide range of logistics topics. Last month, we covered ‘Demurrage and Detention’. Missed it? You can read it here.