Incoterms are the three-letter codes (EXW, FOB, DAP, DDP…) that decide who pays, who carries the risk, and who arranges transport and customs between seller and buyer. A vague or wrongly chosen term is how someone ends up with a freight bill they thought the other side had covered. Nexport Logistics arranges your shipment under any Incoterm, managed in the Nexportal portal alongside Customs and warehousing.
What an Incoterm actually decides
Every Incoterm fixes three things:
- Where risk passes from seller to buyer (the "delivery" point).
- Who pays which costs along the way (transport, insurance, terminal charges).
- Who handles export and import customs.
It does not decide when ownership transfers or how you pay; that's in the sales contract, not the Incoterm.
Incoterms 2010 vs 2020: name the version
The ICC revises the rules only about once a decade (… 2000, 2010, 2020), and the changes are modest, so both Incoterms 2010 and Incoterms 2020 are still in contracts and often used interchangeably. They mostly overlap, but not entirely: the headline change is that 2010's DAT (Delivered At Terminal) became 2020's DPU (Delivered At Place Unloaded), alongside tweaks to the insurance level under CIP and to FCA with on-board bills of lading. Because revisions are slow and infrequent, the old terms linger. Always state the version in the contract ("FCA Rotterdam, Incoterms 2020") so buyer and seller mean exactly the same thing.
The eleven, grouped
Any mode of transport (incl. road, air, multimodal):
| Incoterm | Delivery point | Who clears export / import |
|---|---|---|
| EXW Ex Works | Seller's premises | Buyer does both |
| FCA Free Carrier | Handed to carrier | Seller export, buyer import |
| CPT Carriage Paid To | Carrier (cost to dest.) | Seller export, buyer import |
| CIP Carriage & Ins. Paid | Carrier (cost + ins.) | Seller export, buyer import |
| DAP Delivered At Place | Buyer's place, not unloaded | Seller export, buyer import |
| DPU Delivered At Place Unloaded | Buyer's place, unloaded | Seller export, buyer import |
| DDP Delivered Duty Paid | Buyer's place, duties paid | Seller does both |
Sea and inland waterway only:
| Incoterm | Delivery point | Who clears export / import |
|---|---|---|
| FAS Free Alongside Ship | Alongside the vessel | Seller export, buyer import |
| FOB Free On Board | On board the vessel | Seller export, buyer import |
| CFR Cost & Freight | On board (cost to dest.) | Seller export, buyer import |
| CIF Cost, Ins. & Freight | On board (cost + ins.) | Seller export, buyer import |
A note on FOB/CIF: they're written for break-bulk on board a ship. For containers handed over at a terminal, FCA / CPT / CIP are technically the correct choice, even though FOB and CIF are still used out of habit. See Fob Vs Cif for why that choice matters on LCL.
Prepaid or collect: the freight-terms trap
"Prepaid" means the seller pays the main freight (CPT, CIP, CFR, CIF, DAP, DPU, DDP); "collect" means the buyer pays it (EXW, FCA, FAS, FOB). This drives who the carrier invoices, and it's a frequent source of confusion when an arrival notice says "freight collect" while the buyer expected it prepaid. Always confirm the freight terms against the Incoterm before booking.
An Incoterm never lifts you out of customs law
A point shippers get wrong, usually around EXW: "the buyer pays for everything, so the buyer can sort out the power of attorney and the EX-A too." That is not how it works. An Incoterm is a clause in the sales contract between seller and buyer; customs legislation sits above it and doesn't read your contract. Under the Union Customs Code the exporter on the export declaration must be a party established in the EU (Delegated Regulation, art. 1(19)) — so a non-EU buyer simply cannot be the exporter on the EX-A, however firmly "EXW" is written on the invoice. In practice the EU seller stays involved in the export formalities, as exporter on the declaration or through a representation arrangement. The delivery term divides costs and risk; it does not divide away legal obligations at customs.
Which to use
- EXW: minimal seller effort, but the buyer carries everything including export formalities (often impractical across borders). Loading is the buyer's risk too: under EXW the seller only makes the goods available, so the forklift moment is yours. Under FCA at the seller's premises, the seller loads.
- FCA / FOB: common when the buyer controls the main carriage and their own forwarder.
- CIF / CIP: seller arranges and insures to destination. Convenient for the buyer, who still clears import.
- DAP / DDP: door delivery; DDP means the seller even pays import duty and VAT, so only commit to it if you understand the destination's customs and tax.
How Nexport Logistics arranges it
Nexport Logistics works as a freight forwarder under the FENEX conditions. Whatever Incoterm your contract uses, we book the sea, air or road leg, handle the Customs on the right side, and check that the freight terms and delivery point match what was agreed. You see it all in the Nexportal portal. Not sure which term fits your deal? Email info@nexportlogistics.nl and we'll look at the contract with you.
Official source: ICC — Incoterms 2020 rules. Related: Sea Freight · Air Freight · Road · Customs