What Incoterms do
Incoterms are international rules published by the International Chamber of Commerce. The current version is Incoterms 2020. Each rule is a three-letter code that sets out the seller's and buyer's obligations for transport, insurance, export and import clearance, and when risk passes.
They don't cover price, payment or ownership of the goods. Those belong in the contract.
Rules for any mode of transport
| Rule | Seller delivers | Good for overland imports? |
|---|---|---|
| EXW (Ex Works) | At the seller's premises, not loaded | Possible, but the buyer handles export clearance abroad |
| FCA (Free Carrier) | To the buyer's carrier at an agreed place | Yes, a common choice |
| CPT (Carriage Paid To) | To the carrier; seller pays freight to destination | Yes |
| CIP (Carriage and Insurance Paid To) | As CPT, plus seller insures the cargo | Yes, for valuable cargo |
| DAP (Delivered at Place) | At the destination, ready for unloading | Yes, seller manages transport |
| DPU (Delivered at Place Unloaded) | At the destination, unloaded | Rarely used |
| DDP (Delivered Duty Paid) | At destination, with import duties paid | Only if the seller can clear customs in Uzbekistan |
Sea-only rules
FAS, FOB, CFR and CIF are designed for goods loaded onto a ship at a port. They don't suit shipments that travel by rail or truck, even if suppliers quote them out of habit.
If a supplier quotes FOB for a truck shipment, ask for FCA instead. It puts the handover point where the goods actually change hands.
How to choose
- Choose FCA if you or your forwarder will arrange transport from the supplier's country.
- Choose CPT or CIP if the supplier offers competitive freight to Uzbekistan.
- Choose DAP if you want the supplier to handle everything up to the border or your warehouse, with you clearing customs.
- Always name the exact place: for example "FCA Istanbul, supplier's warehouse, Incoterms 2020".