Incoterms 2020 cheat sheet
Pick any of the 11 Incoterms 2020 rules to see exactly who pays for each leg of the shipment and — critically — where the risk passes from seller to buyer. For the C-terms (CFR, CIF, CPT, CIP) those two points are not the same, and we show both.
Free On Board
Sea & inland waterway onlyThe seller loads the goods on board; you pay the freight and carry the risk from the ship's rail.
Supply chain & cost split
- 1Export packagingS
- 2Loading at originS
- 3Pre-carriageS
- 4Export clearanceS
- 5Origin terminal (THC)S
- 6Main carriageB
- 7InsuranceB
- 8Destination terminal (THC)B
- 9Import clearanceB
- 10Delivery & unloadingB
Where the risk transfers
When the goods are loaded on board the vessel at the named port of shipment.
Who pays for what
| Supply-chain stage | Who pays |
|---|---|
| Export packagingPacking and marking the goods for international transport. | Seller |
| Loading at originLoading the goods onto the first vehicle at the seller's premises. | Seller |
| Pre-carriageInland transport to the terminal or port of departure. | Seller |
| Export clearanceExport customs formalities and duties in the origin country. | Seller |
| Origin terminal (THC)Terminal handling charges at the port or terminal of departure. | Seller |
| Main carriageThe main international leg — ocean freight or air / road carriage. | Buyer |
| InsuranceCargo insurance covering the main carriage. | Buyer |
| Destination terminal (THC)Terminal handling charges at the arrival port or terminal. | Buyer |
| Import clearanceImport customs clearance, duties and taxes at destination. | Buyer |
| Delivery & unloadingOnward delivery to the final point and unloading. | Buyer |
Frequently asked questions
- Who pays for the main freight under FOB?
- Under FOB (Free On Board) the buyer pays the main carriage / freight.
- When does risk transfer under FOB?
- When the goods are loaded on board the vessel at the named port of shipment.
- Is FOB suitable for air or container shipments?
- No. FOB is written for sea and inland-waterway transport only. For containerised or air freight use FCA, CPT or CIP instead.
Find prep-centers and 3PL warehouses that handle inbound, customs and Amazon FBA prep for this kind of shipment.
All 11 Incoterms 2020
Each term has its own page — pick one to see the full breakdown.
You collect the goods from the seller's door and handle everything else — including export clearance.
The seller hands over export-cleared goods to your carrier; you take over from origin onward.
The seller delivers alongside the ship; you cover loading, freight and everything after.
The seller loads the goods on board; you pay the freight and carry the risk from the ship's rail.
The seller pays freight to the destination port, but you carry the risk from origin.
The seller pays freight plus minimum insurance to the port, but the risk is yours from origin.
The seller pays carriage to destination; your risk starts at the first carrier.
The seller pays carriage plus broad insurance to destination; risk is yours from the first carrier.
The seller delivers to your destination ready to unload; you clear import and unload.
The seller delivers and unloads at the destination; you only handle import clearance.
The seller delivers to your door with duties paid — the maximum seller obligation.