EXW
Ex Works
Buyer collects from the seller's named place and is responsible for everything from there — including export clearance.
- Risk transfers
- Seller's premises
- Cost
- Buyer from seller's door
Resources
Incoterms 2020
Incoterms are the International Chamber of Commerce rules that decide who arranges and pays for transport, insurance and customs — and exactly where risk transfers from seller to buyer.
Always write the Incoterm followed by the named place and the year, e.g. FCA Bradford, UK (Incoterms 2020). Vagueness about the named place is the single biggest cause of cost disputes.
Rules for any mode of transport
Use these for road, rail, air and most container shipments.
Any mode
FCA
Free Carrier
Seller delivers cleared for export to a carrier or place nominated by the buyer. Recommended replacement for EXW in most cases.
- Risk transfers
- On loading at named place
- Cost
- Seller to named place, then buyer
CPT
Carriage Paid To
Seller arranges and pays main carriage; risk passes when goods are handed to the first carrier.
- Risk transfers
- On handover to first carrier
- Cost
- Seller pays carriage to named destination
CIP
Carriage and Insurance Paid To
Same as CPT, but the seller also takes out all-risks (Institute Cargo Clauses A) insurance for the buyer.
- Risk transfers
- On handover to first carrier
- Cost
- Seller pays carriage + insurance
DAP
Delivered at Place
Seller delivers when goods are ready for unloading at the named destination. Buyer handles import clearance and unloading.
- Risk transfers
- At named destination, ready for unloading
- Cost
- Seller bears all costs to destination
DPU
Delivered at Place Unloaded
Replaces the old DAT (2010). Seller delivers unloaded at the named place — the only Incoterm where the seller must unload.
- Risk transfers
- Once unloaded at destination
- Cost
- Seller bears all costs incl. unloading
DDP
Delivered Duty Paid
Maximum obligation on the seller — they handle import clearance, duty and taxes in the buyer's country.
- Risk transfers
- At named destination
- Cost
- Seller bears all costs incl. import duty & VAT
Rules for sea & inland waterway only
Use for bulk and break-bulk shipments handed over at the port. Avoid for containers — FCA/CPT/CIP are usually a better fit.
FAS
Free Alongside Ship
Seller delivers alongside the buyer's vessel at the named port. Sea/inland waterway only.
- Risk transfers
- Alongside the vessel at port of shipment
- Cost
- Seller to alongside, buyer from alongside
FOB
Free On Board
Seller delivers on board the vessel nominated by the buyer at the named port of shipment. Sea/inland waterway only.
- Risk transfers
- Once on board the vessel
- Cost
- Seller to on-board, buyer from there
CFR
Cost and Freight
Seller pays the cost and freight to the named destination port. Risk transfers when goods are on board. Sea only.
- Risk transfers
- Once on board the vessel
- Cost
- Seller pays freight to destination port
CIF
Cost, Insurance and Freight
Same as CFR but the seller must also take out minimum cover (Institute Cargo Clauses C) marine insurance. Sea only.
- Risk transfers
- Once on board the vessel
- Cost
- Seller pays freight + (minimum) insurance