Incoterms 2020 for freight quotes
Pick a rule to see who pays each leg of the shipment and where the risk passes from seller to buyer. Use it to decide which charges belong in your quote.
Who pays each leg (S = seller, B = buyer)
Insurance is only an obligation under CIF (minimum cover) and CIP (broad, all-risks cover). Under every other rule the party at risk usually insures, but the rule itself does not require it.
What goes in the forwarder's quote
- Selling on EXW or FCA: your client is the buyer and pays from pickup or from the handover point: quote pickup, origin charges, main carriage and destination charges.
- Selling on CPT, CIP, CFR or CIF: your client is the seller and pays to the destination: quote origin charges and main carriage, plus insurance for CIP and CIF.
- Selling on DAP, DPU or DDP: your client is the seller and pays to the door: quote everything to the named place, plus import duties and taxes for DDP.
For air freight, use FCA, CPT or CIP. FOB, FAS, CFR and CIF are built around loading on a vessel and should not be used for air cargo.
Incoterms® is a trademark of the International Chamber of Commerce. This page is a simplified summary for quoting, not the official text; check the ICC rules and your contract.
The Incoterm goes on the client PDF.
Pick the Incoterms 2020 rule when you build the quote. QUAY prints it on the client PDF next to the lane, the pieces and the validity date, so your client knows exactly what the price covers.
FOB for air freight?
No. Use FCA, CPT or CIP for air and for containers handed over at a terminal. FOB is for goods loaded on board a vessel.
What changed in 2020?
DAT became DPU, CIP needs broader insurance, FCA can come with an on-board bill of lading, and own transport is allowed under FCA, DAP, DPU and DDP.
Who pays duties under DAP?
The buyer. Only DDP puts import clearance, duties and taxes on the seller.