Incoterms 2020 are classified into different categories based on the level of responsibility and risk involved in the transaction. The currently accepted Incoterms 2020 edition includes 11 terms, which are grouped into two categories:
1. Incoterms 2020 for any mode of transport:
- EXW (Ex Works): The seller makes the goods available at their premises. The buyer assumes all responsibilities and costs for transportation, export, and import formalities.
- FCA (Free Carrier): The seller delivers the goods to the carrier or another party specified by the buyer. The buyer assumes responsibility from that point onward.
- CPT (Carriage Paid To): The seller arranges and pays for carriage to a named destination, but risk transfers to the buyer once handed to the carrier.
- CIP (Carriage and Insurance Paid To): Same as CPT, but seller also pays for insurance during transit.
- DAP (Delivered at Place): The seller delivers the goods ready for unloading at the named place. Buyer handles import duties and unloading.
- DPU (Delivered at Place Unloaded): The seller delivers and unloads the goods at the destination. The buyer is responsible for import formalities.
- DDP (Delivered Duty Paid): The seller delivers the goods cleared for import, bearing all risks and costs including duties and taxes.
2. Incoterms 2020 for sea and inland waterway transport:
- FAS (Free Alongside Ship): The seller delivers the goods alongside the ship at the port. The buyer assumes all further responsibilities.
- FOB (Free on Board): The seller delivers the goods on board the ship and clears for export. Buyer takes over from that point.
- CFR (Cost and Freight): The seller pays for transportation to the port of destination. Buyer is responsible for insurance and import duties.
- CIF (Cost, Insurance, and Freight): Same as CFR, but seller also pays for insurance.