What are Incoterms? Choosing a delivery rule
A practical introduction to allocating delivery tasks, costs and transport risk.
What do the rules cover?
ICC Incoterms rules explain delivery obligations, cost allocation and the point where transport risk passes between seller and buyer. The 2020 edition has 11 rules. Ownership, payment and the rest of the sale contract still require separate agreement.
Name the place precisely
Include the named place and the edition, not just three letters. For example: FCA, seller’s warehouse address, Incoterms® 2020. Confirm who handles loading, export clearance, main carriage and import clearance before comparing prices.
Cost and risk are different
Under C rules the seller may pay carriage to the agreed destination while risk passes earlier. Freight paid to destination does not necessarily mean seller’s risk until arrival. Review insurance separately; CIF and CIP have different insurance requirements.
Prepare a comparable quotation
Send cargo type, packaging, weight, dimensions, exact origin and destination, ready date and proposed delivery rule. Ask for inclusions and exclusions. Use the official rules and a contract-specific review for final decisions.
Choosing for the handover
For terminal-delivered container cargo, consider FCA versus FOB. Distinguish maritime-only rules, unloading under DAP/DPU and the practical ability to complete import clearance under DDP.
Before you proceed
- Confirm scope and references.
- Use final cargo data.
- Keep the approved version.
Ready for your next shipment.
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