Incoterms 2020 Explained: All 11 Rules in One Table (EXW to DDP)

Incoterms 2020 are 11 trade rules published by the International Chamber of Commerce (ICC). They split three things between seller and buyer: transport costs, the point where risk passes, and who clears customs. Seven rules work for any mode of transport (EXW, FCA, CPT, CIP, DAP, DPU, DDP), and four apply only to sea and inland waterway freight (FAS, FOB, CFR, CIF).

Where Incoterms come from and why they matter

The rules are issued by the ICC in Paris, and the current edition is Incoterms 2020 (the earlier 2010 set still appears in old contracts, so always state the year). The right code is not a formality. It decides who pays freight, who arranges export and import clearance, who bears the loss when a pallet is smashed on the ramp, and who suddenly receives a bill for duty and import VAT. Three letters on a purchase order can move a few hundred or a few thousand euros from one party to the other.

Always write the rule together with a named place, for example FCA Kielce or DAP London, buyer's warehouse. A bare three-letter code without a location is incomplete and invites misunderstanding.

Table of all 11 Incoterms 2020 rules

Here is the full set in one place. The group is the first letter of the code: E (departure), F (main carriage unpaid by seller), C (main carriage paid by seller), D (delivered on arrival).

The key point in the C group: the seller pays freight to the port or destination, but risk passes to the buyer much earlier, at the moment the goods are handed over. So CIF does not mean the seller is responsible for the cargo all the way to the port of destination.

EXW and FCA: the two most common choices in road freight

In European road freight we most often work with EXW and FCA. EXW is convenient for the seller (the goods sit at their premises and that is where their role ends), but it pushes even loading and the whole export clearance onto the buyer. For a Polish exporter that is often a bad call, because formally the foreign buyer has to arrange the Polish export declaration, which they usually cannot do.

FCA fixes this. The seller handles export clearance and hands the goods to the carrier nominated by the buyer, and from that moment the risk sits with the buyer. For exports from Poland, FCA is usually a cleaner and safer choice than EXW. If you are not sure which rule to put in your contract, see our customs clearance page or contact us before you sign.

The D group: DAP, DPU and DDP, delivery to the door

The D rules mean the seller carries the goods to a place at the buyer's end. They differ in three details that cause the most trouble in practice:

• DAP - the seller delivers, but unloading is on the buyer, and the buyer pays import clearance, duty and VAT.
• DPU - the only rule where the seller must unload the goods at destination. This is the former DAT from Incoterms 2010, renamed to cover any place, not just a terminal. Do not confuse DPU with DAT.
• DDP - the maximum obligation for the seller. They pay everything, including import clearance, duty and import tax in the buyer's country.

DDP looks attractive to the buyer, but for the seller it is a serious commitment. They must register for tax in a foreign country or appoint a representative, otherwise they get stuck at the border with a duty and VAT bill they cannot settle. We break down that dispute separately in our article on the DAP vs DDP mismatch.

The sea rules FAS, FOB, CFR, CIF: when to use them

Use the four maritime rules only for waterborne freight, where goods are actually loaded alongside or on board a vessel. The ICC explicitly advises against using FOB or CIF for containers handed over at a terminal, because a container reaches the operator long before it reaches the ship. For containerised cargo the right choices are FCA, CPT and CIP. This is a mistake we see regularly in contracts: FOB written where it should be FCA.

Common mistakes that cost money

• A code without a place. "CIF" with no port or "DAP" with no address is an incomplete instruction and an open door to dispute.
• No year. Incoterms 2010 and 2020 differ (for one, DAT became DPU). Always write "Incoterms 2020".
• Confusing the cost point with the risk point in the C group. The seller pays freight but hands over risk at dispatch.
• DDP without VAT registration in the country of import. The most expensive slip, because the cargo halts at the border.
• Insurance. Only CIF and CIP oblige the seller to insure. Under the other rules you insure yourself if you want cover.

Keep the VAT on the transport service itself in view too, because that is a different matter from import VAT on the goods. We explain it in our piece on VAT on international transport invoices. For shipments to Britain there is also the post-Brexit question of who runs import clearance, which we unpack in our article on Incoterms for UK transport.

How to pick the right rule for your shipment

There is no single best rule. There is only the one that fits your role and your capabilities. If you export from Poland and want control over the export declaration, aim for FCA. If you want to relieve an EU customer and deliver to the door without taking on the import, choose DAP. Take DDP only when you have a registration and a representative in the buyer's country. The full, authoritative description of every rule is published by the International Chamber of Commerce (ICC), and that is the source worth checking every time.

At OTSL we have run Poland to United Kingdom lanes since 2011, along with EU, Switzerland and Norway routes, with our own customs agencies on both the Polish and British sides. If you are unsure which rule to write into a contract and how to split the clearance costs, get in touch. You get a single point of contact who walks you through the job from loading to import clearance.

How do Incoterms affect customs clearance responsibilities?

Incoterms define whether the buyer or the seller is responsible for export and import customs formalities, dictating who pays applicable duties and files statutory documentation at the border.

Step by step

1. Select the right rule. Choose Incoterms matching the capabilities of both parties regarding transport and customs clearance.
2. Specify the delivery point. Include the exact address and handover point in the contract alongside the Incoterms edition year.
3. Assign customs duties. Clarify who manages export and import customs clearance procedures prior to shipment.
4. Arrange the transport contract. Organise carriage by road or sea according to the agreed division of risk and cost.
5. Transfer risk and documentation. Notify the buyer upon arrival at the designated location and hand over all transport documents.

Definitions

• EXW (Ex Works): A rule where the seller makes the goods available at their own premises or warehouse.
• FCA (Free Carrier): A term where the seller hands over the cargo to a carrier nominated by the buyer at a specified named place.
• DAP (Delivered at Place): Delivery to a named place of destination, where the seller handles transport but not import clearance.
• DDP (Delivered Duty Paid): A rule placing full responsibility on the seller for transport as well as customs formalities and charges in the destination country.

When does this rule not apply?

This rule does not apply to ownership transfer, payment terms, or breach of contract remedies, unless explicitly defined elsewhere in your commercial agreement.

The OTSL role

When arranging cross-border transport, OTSL assists with logistically sound execution and clearance processes across borders. You can rely on our Road transport (FTL) options and review our guide on Incoterms in transport to the UK: who arranges and pays for customs to align duties correctly.

Sources

• GOV.UK: Import goods into the UK
• GOV.UK: Export goods from the UK
• European Commission: Customs Union