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The new incoterms are out and it’s been a full decade since they were reviewed and changed. J.M. Rodgers’ Compliance experts went through the 2020 Incoterms and made sure that our customers are aware of anything new as well as what every term means for the buyer and seller.

Definition of Incoterms

The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law. They create a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts.

Benefits of Incoterms

Shippers worldwide use standard trade definitions (called Incoterms) to spell out who’s responsible for the shipping, insurance, and tariffs on an item; they’re commonly used in international contracts and are protected by the International Chamber of Commerce copyright. Incoterms significantly reduce misunderstandings among traders and thereby minimize trade disputes and litigation. Familiarize yourself with Incoterms so you can choose terms that will enable you to provide excellent customer service and clearly define who is responsible for which charges.

Different Types of Incoterms

Group 1. Incoterms that apply to any mode of transport are:

EXW: Ex Works

FCA: Free Carrier

CPT: Carriage Paid To

CIP: Carriage and Insurance Paid To

DAT: Delivered at Terminal

DAP: Delivered at Place

DDP: Delivered Duty Paid

Group 2. Incoterms that apply to sea and inland waterway transport only:

FAS: Free Alongside Ship

FOB: Free on Board

CFR: Cost and Freight

CIF: Cost, Insurance, and Freight


Here is a visual of the Incoterms that helps show the differences between the Incoterms.

If you’d like to discuss how you can improve your shipping process  or just to learn more, please reach out to