INCOTERMS 2020
International Commercial Terms defining responsibilities between buyers and sellers for the delivery of goods in international trade
INCOTERMS 2020 - Point of Delivery and Transfer of Risk
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INCOTERMS 2020 Definitions
INCOTERMS are internationally recognized standard trade terms used in international and domestic contracts for the sale of goods. They define the responsibilities, costs, and risks borne by both buyers and sellers in an international transaction.
The seller makes the goods available at their premises. The buyer is responsible for all transportation costs and risks.
The seller delivers the goods to a carrier or another person nominated by the buyer at the seller's premises or another named place.
The seller must place the goods alongside the ship at the named port of shipment. The buyer assumes all costs and risks from that moment.
The seller delivers the goods on board the vessel nominated by the buyer. Risk transfers when the goods are loaded onto the ship.
The seller pays for the costs and freight to bring the goods to the port of destination, but risk transfers when the goods are loaded on the vessel.
Same as CFR but the seller also contracts for insurance cover against the buyer's risk of loss/damage during carriage.
The seller pays for carriage to the named place of destination, but risk transfers when the goods are handed to the first carrier.
Same as CPT but the seller also contracts for insurance cover against the buyer's risk of loss/damage during carriage.
The seller delivers and unloads the goods at the named place of destination. The seller bears all risks until the goods are unloaded.
The seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport, ready for unloading.
The seller delivers the goods when they are placed at the disposal of the buyer, cleared for import and with all duties and taxes paid.
Important Notes
- •INCOTERMS 2020 are the latest version, valid since January 1, 2020.
- •Always specify which INCOTERMS version you are using in your contracts (e.g., "FOB Shanghai INCOTERMS 2020").
- •INCOTERMS define delivery, risk transfer, and cost allocation, but do NOT cover ownership transfer or payment terms.
- •Choose the appropriate INCOTERM based on your shipping method, experience level, and desired risk allocation.