A set of universal trade terms published by the International Chamber of Commerce (ICC). They consist of three-letter codes intended to communicate the tasks, costs, and risks associated with the goods transportation and delivery in an international transaction. They define the responsibilities of sellers and buyers for different parts of the transaction.
Updated every decade by the ICC, Incoterms are widely adopted by trade organizations, legal systems, and businesses, providing a common framework for international sales contracts. The terms are categorized into two groups based on transportation method: seven apply to all modes of transport, while the remaining four are specific to sea, land, or inland waterway shipments.
Incoterms for Any Mode of Transport
- CIP: Carriage and Insurance Paid to
- CPT: Carriage Paid to
- DAP: Delivered at Place
- DPU: Delivered at Place Unloaded
- DDP: Delivered Duty Paid
- EXW: Ex Works
- FCA: Free Carrier
Incoterms for Sea and Inland Waterway Transport
- CFR: Cost and Freight
- CIF: Cost, Insurance, and Freight
- FAS: Free Alongside Ship
- FOB: Free on Board