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What are Incoterms?

Incoterms (International Commercial Terms) are an international standard defining the conditions of goods delivery in international trade. They establish the division of responsibility between the seller and the buyer in terms of:

The International Chamber of Commerce (ICC) created these rules to streamline global trade and avoid misunderstandings. The first Incoterms rules were published in 1936 and are regularly updated. The currently applicable version is Incoterms 2020.

Why are Incoterms important in maritime shipping?

Incoterms are divided into two main groups: rules applicable to all modes of transport and rules specifically for maritime and inland waterway transport.

Incoterms were created to standardize trade transactions and define the transfer of risk and cost responsibility. Their updates occur approximately every 10 years due to changes and innovations in global markets. However, nothing prevents clients in 2025 from signing a contract under Incoterms 2010.

Incoterms 2010

Any mode of transport

Maritime transport

EXWEx works

From factory (specified location)

FCAFree Carrier

Free carrier (specified location)

CPTCarriage paid to

Carriage paid to (specified destination)

CIPCarriage and insurance paid to

Carriage and insurance paid to (specified destination)

DATDelivery at terminal

Delivered at terminal (specified location)

DAPDelivery at place

Delivered at place (specified location)

DDPDelivered duty paid

Delivered, duty paid (specified destination)

FASFree alongside ship

Free alongside ship (specified port of loading)

FOBFree on board

Free on board (specified port of loading)

CFRCost and freight

Cost and freight (specified destination)

CIFCost, insurance and freight

Cost, insurance, and freight (specified destination)

CostsRiskInsurance

Incoterms 2020

Any mode of transport

Maritime transport

EXWEx works

From factory (specified location)

FCAFree Carrier

Free carrier (specified location)

CPTCarriage paid to

Carriage paid to (specified destination)

CIPCarriage and insurance paid to

Carriage and insurance paid to (specified destination)

DAPDelivery at place

Delivered at place (specified location)

DPUDelivery at place unloaded

Delivered at place, unloaded (specified location)

DDPDelivered duty paid

Delivered, duty paid (specified destination)

FASFree alongside ship

Free alongside ship (specified port of loading)

FOBFree on board

Free on board (specified port of loading)

CFRCost and freight

Cost and freight (specified destination)

CIFCost, insurance and freight

Cost, insurance, and freight (specified destination)

CostsRiskInsurance

How to choose the right Incoterms rule?

1. Determine the type of transport: Is it maritime, air, rail, or multimodal transport? Example: For maritime transport, rules such as FOB or CIF may be more suitable.

2. Define responsibilities and risks: Consider who should be responsible for transport costs, insurance, and customs formalities.

3. Consult with your trade partner: Decide which rule best suits both parties.

4. Consider local regulations: In some countries, certain rules may be more common or even required.

Most commonly used Incoterms rules

Incoterms are an essential element of international trade, facilitating cooperation between exporters and importers. By clearly dividing responsibilities, business partners avoid misunderstandings and additional costs. Choosing the right Incoterms rule depends on the type of transport, the level of risk, and the obligations that both parties are willing to assume.

If you need help selecting the right rule or want to learn more, contact our experts – we will organize your transport in accordance with Incoterms principles!