Last reviewed:
Incoterms Selector Wizard
Answer four questions to get a recommended Incoterm rule with the reasoning, LC compatibility and typical alternatives.
ICC has started work on Incoterms 2030; Incoterms 2020 remains current.
Any mode, seller arranges carriage and insurance - CIP requires ICC (A) all-risks cover under Incoterms 2020.
What is the Incoterms wizard?
Numerical Example: Multimodal Recommendation
CIP is recommended over CIF for containerized cargo as it covers risk transfer at the origin terminal rather than the vessel rail.
| Incoterm | Mode | Risk Transfer Point | Insurance |
|---|---|---|---|
| EXW | Any | Seller's premises | Buyer's responsibility |
| FCA | Any | Named place / carrier | Buyer's responsibility |
| FOB | Sea / inland waterway | On board at port of shipment | Buyer's responsibility |
| CFR | Sea / inland waterway | On board at port of shipment | Buyer's responsibility |
| CIF | Sea / inland waterway | On board at port of shipment | Seller, min ICC (C), 110% CIF |
| CPT | Any | Handover to first carrier | Buyer's responsibility |
| CIP | Any | Handover to first carrier | Seller, ICC (A) all-risks, 110% CIP |
| DAP | Any | Named destination, ready to unload | Buyer's responsibility |
| DPU | Any | Named destination, unloaded | Buyer's responsibility |
| DDP | Any | Named destination, import cleared | Buyer's responsibility |
Need help interpreting this result?
Ask Trade Expert AI how it applies to your transaction. Free with an account.
Frequently asked questions
What does Incoterms 2020 mean?
Incoterms 2020 are 11 international rules published by the ICC that define when risk and costs transfer between seller and buyer. They specify who arranges transport, insurance, customs and export/import, and who bears cost. All contracts should explicitly state the agreed Incoterm (e.g., CIF Singapore).
What's the difference between risk and cost transfer?
Risk = responsibility if goods are lost/damaged. Cost = who pays for freight/insurance. These often differ. Under FOB, risk transfers at the ship's rail (when goods load), but cost of freight passes to buyer immediately. Cost and risk can transfer at different moments.
How do I choose between FOB and CIF?
FOB suits buyers who want to control freight and shopping for competitive rates. CIF suits buyers who want simplicity-seller handles logistics. For LC at sight, CIF is preferable: seller insures, providing an insurance cert that satisfies LC requirements. FOB with LC is more complicated.