Incoterms 2020 consists of 11 rules explaining how delivery, transportation costs and damage risks will be shared between the buyer and seller in international and domestic sales. To choose the correct rule, it is not enough to look only at abbreviations such as EXW, FOB or CIF; the mode of transport, the point where the goods are actually delivered, and the parties' customs responsibility must be evaluated together.
What Incoterms Define, What They Don’t?
The topics he determined
It is the point where the delivery obligation, transportation and insurance organization, export and import transactions, sharing of costs and the risk of damage pass.
Issues that he does not determine alone
Payment method and maturity, currency, transfer of ownership, sanctions in case of breach of contract and applicable law.
How Many Groups Are Incoterms 2020 Delivery Methods Divided Into?
Land, air, rail and multimodal transportation
EXW, FCA, CPT, CIP, DAP, DPU and DDP. Sea route can be used with these rules; However, shipment is not limited to sea transportation only.
Sea transportation from port to port
FAS, FOB, CFR and CIF. In these rules, the delivery and risk point is associated with the side of the ship or the moment of loading onto the ship.
7 Delivery Types Used in All Transportation Types
On-site delivery
The seller makes the goods ready for the use of the buyer at the specified place.
Risk transfer: When the goods are made available to the buyer.
Loading and export operations are mostly on the buyer.
Delivery to carrier
The seller delivers the goods at the designated location to the carrier selected by the buyer.
Risk transfer: When delivered to the carrier at the designated location.
Export customs procedures are the responsibility of the seller.
Carriage paid
The seller pays the main transportation fee to the designated destination.
Risk transfer: When the goods are delivered to the first carrier.
Although the expense remains with the seller until arrival, the risk is transferred beforehand.
Transportation and insurance paid
The seller arranges the main transportation and cargo insurance within the scope of the contract.
Risk transfer: When the goods are delivered to the first carrier.
Insurance liability is added to the CPT rule.
Delivery at the designated location
The seller prepares the goods for unloading at the designated destination.
Risk transfer: When the goods are ready for unloading at destination.
Unloading and import customs duties are the responsibility of the buyer.
Unloaded delivery at the designated place
The seller delivers the goods by unloading them from the vehicle at the specified destination.
Risk transfer: When the goods are unloaded at destination.
It is the only Incoterms rule that the seller is responsible for unloading.
Delivery with customs duties paid
The seller makes the goods ready at the destination with the import procedures completed.
Risk transfer: When the goods are ready for unloading at destination.
The seller must be able to legally carry out import procedures in the target country.
4 Delivery Methods Used Only in Sea and Inland Waterway Transportation
Delivery by ship
The seller brings the goods to the ship at the loading port.
Risk transfer: When the goods are left in the direction of the ship.
It is used only in sea and inland waterway transportation.
delivery on board
The seller loads the goods onto the ship at the designated loading port.
Risk transfer: When the goods are loaded onto the ship.
Buyer arranges main sea freight.
Expenses and freight
Seller pays sea freight to destination port.
Risk transfer: When the goods are loaded onto the ship at the port of loading.
Freight is on the seller, maritime risk is on the buyer.
Expenses, insurance and freight
The seller arranges cargo insurance in addition to sea freight.
Risk transfer: When the goods are loaded onto the ship at the port of loading.
Insurance liability is added to the CFR rule.
Transportation Cost and Damage Risk May Not Be Transferred at the Same Place
In CPT and CIP, the seller pays for transportation to the designated destination; The risk passes to the buyer when the goods are delivered to the first carrier. In CFR and CIF, while the seller pays the freight to the port of destination, the risk is transferred when the goods are loaded onto the ship at the loading port. Therefore, the bid cost and the risk point should be checked in separate lines.
Simple Shipment Flow with Three Delivery Methods
Seller loads, carrier picks up
The seller completes the export transaction and loads the goods into the vehicle designated by the buyer at his own facility. The risk passes to the carrier upon delivery.
Freight moves forward, risk is transferred behind
The seller pays for transportation until arrival. In return, the risk passes to the buyer when the goods are delivered to the first carrier.
Seller bears the risk until destination
The goods are delivered when they are ready for unloading at the buyer's warehouse. Unloading and import customs procedures are the responsibility of the buyer.
How to Choose the Right Incoterms Rule?
Determine transport type
Does the shipment proceed by ship only, or is land, air, rail or more than one type of transportation used?
Find the actual pickup point
At what point is the goods actually transferred at the factory, terminal, port, carrier warehouse or buyer's facility?
Consider cost and risk separately
Write down who pays the main transportation fee and at what point the risk of damage passes as two separate decisions.
Verify customs responsibility
Check which party will carry out the export and import transactions and whether they are authorized to do so in the relevant country.
Write the location and version clearly
Add the port, terminal or street address and “Incoterms® 2020” next to the rule code.
Rule + Open Delivery Point + Incoterms® 2020
FCA Korgün Factory, Istanbul, Türkiye, Incoterms® 2020
DAP Buyer Warehouse, Berlin, Germany, Incoterms® 2020
If a large port or terminal is written, the gate, dock or terminal point should be specified as much as possible. Uncertainty at the delivery point may result in both additional costs and damage disputes.
Common Mistakes When Choosing Incoterms
Just typing three letter codes
The term “FCA” alone is insufficient. The delivery point and the 2020 version of the rule must be clearly stated in the contract.
Considering that the party paying the freight also bears the risk
In CPT, CIP, CFR and CIF rules the seller pays the main freight; the risk transfers earlier.
Automatically selecting FOB on container load
If the container is delivered to the carrier at the terminal, FCA, CPT or CIP may be more appropriate depending on the actual delivery method.
Thinking that the seller is relieved of all responsibilities with EXW
Loading, export regulations and document flow can cause problems in practice. The FCA option should be evaluated separately.
Selecting DDP without checking import authorization
It may not be possible for the seller to act as an importer or fulfill his tax liability in the destination country.
Using delivery method instead of payment and title provision
Incoterms alone do not determine payment terms, currency or when ownership of the goods transfers
Don't Keep the Delivery Method Just an Abbreviation on the Invoice
Rule code in sales quotation, order, shipment and invoice; designated place; version; main transportation, insurance and customs costs; The point to which the risk is transferred and the responsible parties should be monitored together. In this way, it can be seen which expenses are included in the bid cost and who will take action in case of delay or damage.
The method of delivery does not replace the certificate of origin or circulation. document separation In the A.TR and EUR.1 guide, foreign currency transactions in the export and foreign exchange management article, while the carbon regulation In the SKDM guide You can review it separately.
Frequently Asked Questions
Is it mandatory to use Incoterms 2020?
The parties decide to use it in sales contracts. When used, the rule, explicit delivery point, and version information must be written together.
What is the main difference between CIF and CIP?
CIF can only be used in sea and inland waterway transportation, while CIP can be used in all types of transportation. Risk points and the insurance coverage the seller must provide are also not the same.
Can FOB be used in container transportation?
If goods are not delivered directly on board, FOB may not accurately reflect the actual delivery point. FCA should be evaluated in flows where the container is delivered to the carrier at the terminal.
Do Incoterms transfer ownership of the goods?
No. Transfer of risk of damage and transfer of legal ownership are different issues. Ownership and payment provisions should be separately regulated in the sales contract.
Make a Contract-Specific Check Before Shipment
This content was reviewed on 11 September 2026 based on ICC’s Incoterms 2020 announcements and the Ministry of Trade’s foreign‑trade training resources. The official scope of the rules From ICC Incoterms 2020 page and From the ICC Q&A source verify.
This article is for general information purposes; It is not a substitute for legal advice or customs consultancy. The product, country, transportation contract and the authorities of the parties should be evaluated by experts before shipment.
To evaluate how the delivery method will be reflected in commercial records import and export program You can review the page; also verify the risk and cost distribution in the contract.
Examine the responsibilities and data flow in your foreign trade process
How to track the offer, delivery method, transport cost, customs document and invoice on the same transaction with our business analysis approach evaluate.