Incoterms are standard trade terms published by the International Chamber of Commerce that define who is responsible for what in an international sale: transport, insurance, export and import clearance, and the point at which risk passes from seller to buyer.
There are 11 rules in the 2020 edition. Seven work for any mode of transport: EXW, FCA, CPT, CIP, DAP, DPU and DDP. Four are only for sea and inland waterway: FAS, FOB, CFR and CIF.
EXW puts maximum responsibility on the buyer, while DDP puts it on the seller. FOB and CIF are very common in ocean trade, but for containerised cargo FCA, CPT and CIP are technically better because risk passes when the goods are handed to the carrier, not when they are loaded on board.
Choose the term that matches who can best control each leg. If you cannot clear goods in the destination country, avoid DDP. If you do not control origin logistics, avoid EXW. Always name the exact place, such as "FOB Nhava Sheva".
Try: Incoterms 2020 Guide →This article is general information, not legal or tax advice. Rules and rates change — confirm with a licensed customs broker before filing.