Incoterms (International Commercial Terms) are a set of 11 standardised rules, published by the International Chamber of Commerce (ICC), that define the responsibilities of sellers and buyers in international trade transactions.
The 2020 edition, effective from 1 January 2020, replaces the previous 2010 version. Each term precisely establishes who handles transport, who pays for insurance, who manages customs formalities and at which point the risk of loss or damage passes from seller to buyer.
Choosing the correct Incoterm is essential to avoid contractual misunderstandings, properly manage logistics costs and protect both parties in the event of a loss during transport.
Our customs experts are available to help you choose the Incoterm best suited to your commercial and logistics needs.
Important note Incoterms only regulate the transfer of costs and risks, not the transfer of ownership of goods. Ownership is governed by the sales contract and applicable law.
Why Incoterms matter for your shipments
Choosing the correct Incoterm determines who pays for transport, who bears the risk and who handles customs formalities. A mistake in Incoterm selection can lead to unexpected costs, customs delays and contractual disputes. As freight forwarders specialising in Switzerland–EU trade, our experts guide you to the most suitable term.
EXW — Ex Works
(…named place of delivery)
Rarely used in international trade because the buyer must handle export clearance in the seller's country. More common for domestic sales or when the buyer has a local agent at origin.
Seller obligations
Make goods available at the seller's premises (factory, warehouse, works).
Package and mark the goods for collection.
Provide the commercial invoice and any documentation required for the buyer to take delivery.
Buyer obligations
Arrange and pay for all transport from the seller's premises to final destination.
Bear all risks from the moment the goods are placed at the buyer's disposal.
Arrange and pay for export and import customs clearance.
Arrange and pay for cargo insurance (if desired).
Key points
Minimum obligation for the seller — maximum obligation for the buyer.
The buyer must handle export formalities, which can be problematic if the buyer is not established in the country of export.
Not recommended for international trade unless the buyer can manage export clearance in the seller's country.
FCA — Free Carrier
(…named place of delivery)
The most versatile and widely recommended Incoterm. Suitable for any mode of transport. Especially recommended for containerised cargo instead of FOB.
Seller obligations
Deliver goods to the carrier or nominated person at the named place.
Clear goods for export.
If delivery at seller's premises: load goods onto the collecting vehicle.
If delivery elsewhere: deliver goods on the arriving vehicle, not unloaded.
Buyer obligations
Arrange and pay for main carriage from the named place to destination.
Bear all risks from the point the goods are delivered to the carrier.
Arrange and pay for import customs clearance.
Arrange and pay for cargo insurance (if desired).
Key points
FCA is the recommended replacement for FOB when goods are containerised.
Risk transfers when goods are delivered to the carrier at the named place — not when loaded on the vessel.
The new Bill of Lading option (Incoterms 2020) solves a long-standing problem with letters of credit requiring on-board BLs under FCA terms.
CPT — Carriage Paid To
(…named place of destination)
When the seller wants to arrange carriage to the buyer's country but does not want to bear the risk during transit. Common in air freight and multimodal shipments.
Seller obligations
Deliver goods to the first carrier at origin.
Contract and pay for carriage to the named place of destination.
Clear goods for export.
Risk transfers to the buyer when goods are handed to the first carrier — not at destination.
Buyer obligations
Bear all risks from the moment goods are delivered to the first carrier at origin.
Arrange and pay for import customs clearance.
Arrange and pay for cargo insurance (if desired — note: under CPT the seller has no obligation to insure).
Receive goods at the named place of destination.
Key points
Critical distinction: the seller pays for carriage to destination, but risk transfers at origin when goods are given to the first carrier.
The seller has NO obligation to provide cargo insurance under CPT.
If insurance is important, use CIP instead.
CIP — Carriage and Insurance Paid To
(…named place of destination)
When the seller arranges carriage and the buyer wants insurance included. Preferred over CPT when cargo value is significant.
Seller obligations
Deliver goods to the first carrier at origin.
Contract and pay for carriage to the named place of destination.
Clear goods for export.
Obtain cargo insurance covering the buyer's risk during transit — minimum coverage: Institute Cargo Clauses (A) or equivalent (all-risks cover). This is a change from Incoterms 2010.
Buyer obligations
Bear all risks from the moment goods are delivered to the first carrier at origin.
Arrange and pay for import customs clearance.
Receive goods at the named place of destination.
Key points
Same as CPT but with mandatory insurance.
Under Incoterms 2020, CIP requires Institute Cargo Clauses (A) — all-risks cover — which is a higher level of insurance than CIF (which only requires Clauses (C)).
Risk still transfers at origin, not at destination.
DAP — Delivered at Place
(…named place of destination)
The most popular Incoterm for EU-to-Switzerland deliveries. The EU seller delivers to the Swiss buyer's door; the Swiss buyer handles import customs formalities.
Seller obligations
Deliver goods on the arriving vehicle, ready for unloading at the named place of destination.
Contract and pay for carriage to destination.
Clear goods for export.
Bear all risks until goods arrive at the named place of destination.
Buyer obligations
Unload the goods from the arriving vehicle.
Arrange and pay for import customs clearance (duties, VAT, formalities).
Bear all risks after the goods are made available on the arriving vehicle at the named place.
Key points
Seller bears all risks and costs to the named destination — except import clearance and unloading.
Very common in EU–Switzerland trade: European sellers deliver DAP Switzerland, and the Swiss buyer handles import customs clearance.
The buyer must be ready to clear goods through customs promptly to avoid demurrage.
DPU — Delivered at Place Unloaded
(…named place of destination)
When the seller can arrange unloading at destination — for example at a port terminal, warehouse, or container yard.
Seller obligations
Deliver goods unloaded at the named place of destination.
Contract and pay for carriage to destination.
Clear goods for export.
Bear all risks until goods are unloaded at the named place of destination.
The seller must have the ability to arrange unloading at the destination.
Buyer obligations
Arrange and pay for import customs clearance.
Bear all risks after the goods are unloaded at the named place of destination.
Key points
DPU replaced DAT (Delivered at Terminal) in Incoterms 2020.
The only Incoterm where the seller is responsible for unloading at destination.
The 'named place' can be any place, not just a terminal — but the seller must be capable of arranging unloading there.
DDP — Delivered Duty Paid
(…named place of destination)
When the seller wants to offer a 'door-to-door, all-inclusive' price. Common in e-commerce and B2C. Requires the seller to manage import formalities in the destination country.
Seller obligations
Deliver goods on the arriving vehicle, ready for unloading at the named place of destination.
Contract and pay for carriage to destination.
Clear goods for export AND import — including paying all import duties, taxes (VAT), and handling all customs formalities in the destination country.
Bear all risks until goods arrive at the named place of destination.
Buyer obligations
Unload the goods from the arriving vehicle.
Bear all risks after the goods are made available on the arriving vehicle at the named place.
Key points
Maximum obligation for the seller — minimum obligation for the buyer.
The seller must be able to clear goods for import in the buyer's country — this often requires a local customs number and fiscal representation.
For Swiss imports under DDP, the foreign seller needs a Swiss customs number and may need to register for Swiss VAT.
The seller cannot reclaim Swiss import VAT unless VAT-registered in Switzerland.
FAS — Free Alongside Ship
(…named port of shipment)
Bulk cargoes (grain, ore, timber) loaded directly from quay to vessel. Rarely used for containerised goods.
Seller obligations
Deliver goods alongside the vessel at the named port of shipment (e.g. on the quay or on a barge).
Clear goods for export.
Bear all risks until goods are placed alongside the vessel.
Buyer obligations
Arrange and pay for loading onto the vessel.
Contract and pay for main sea carriage.
Bear all risks from the moment goods are alongside the vessel.
Arrange and pay for import customs clearance.
Arrange and pay for cargo insurance (if desired).
Key points
Only for sea and inland waterway transport.
Risk transfers when goods are placed alongside the ship — not when loaded on board.
Not suitable for containerised cargo (use FCA instead).
FOB — Free On Board
(…named port of shipment)
Traditional sea freight for bulk and break-bulk cargo. For containers, ICC recommends FCA instead, though FOB is still widely used by convention.
Seller obligations
Deliver goods on board the vessel at the named port of shipment.
Clear goods for export.
Bear all risks until goods are on board the vessel.
Buyer obligations
Contract and pay for main sea carriage from the port of shipment.
Bear all risks from the moment goods are on board the vessel.
Arrange and pay for import customs clearance.
Arrange and pay for cargo insurance (if desired).
Key points
Only for sea and inland waterway transport — NOT for containerised cargo delivered at a container terminal (use FCA instead).
Risk transfers when goods pass the ship's rail / are on board the vessel.
Despite ICC recommendations, FOB remains extremely widely used — even for containers — due to trade custom.
CFR — Cost and Freight
(…named port of destination)
When the seller arranges ocean freight but does not want to provide insurance. The buyer should arrange their own cargo insurance.
Seller obligations
Deliver goods on board the vessel at the port of shipment.
Contract and pay for sea freight to the named port of destination.
Clear goods for export.
Risk transfers to the buyer when goods are on board at origin — not at destination.
Buyer obligations
Bear all risks from the moment goods are on board the vessel at the port of shipment.
Arrange and pay for import customs clearance.
Arrange and pay for cargo insurance (if desired — the seller has no insurance obligation under CFR).
Key points
The seller pays freight to destination, but risk transfers at the port of shipment.
No insurance obligation on the seller — if insurance is needed, use CIF.
Only for sea and inland waterway transport.
CIF — Cost, Insurance and Freight
(…named port of destination)
Very common in global commodity trade. The seller arranges freight and basic insurance. For higher insurance cover, negotiate Clauses (A) or use CIP.
Seller obligations
Deliver goods on board the vessel at the port of shipment.
Contract and pay for sea freight to the named port of destination.
Clear goods for export.
Obtain cargo insurance covering the buyer's risk during transit — minimum coverage: Institute Cargo Clauses (C) (basic cover only).
Buyer obligations
Bear all risks from the moment goods are on board the vessel at the port of shipment.
Arrange and pay for import customs clearance.
Key points
Same as CFR but with mandatory insurance.
Under Incoterms 2020, CIF only requires Institute Cargo Clauses (C) — basic cover. This is LOWER than CIP which requires Clauses (A).
CIF is heavily used in commodity trading (oil, grain, metals).
Risk transfers at origin, not at destination — the insurance protects the buyer during transit.