Updated October 2026 · Based on ICC Incoterms® 2020, the edition in force
- 11 rules7 for any mode of transport, 4 for sea and inland waterway only
- 2020Edition in force in 2026 — there is no “Incoterms 2026”
- 4 familiesE, F, C and D, from least to most seller responsibility
- 1936Year of the first edition; revised roughly every ten years
What are Incoterms?
Incoterms® (International Commercial Terms) are standard trade terms owned by the International Chamber of Commerce. Each rule is a three-letter code followed by a named place, for example FCA Laredo, Texas. Written into a sales contract, the rule tells both parties four things:
- Who arranges and pays for the main transport.
- Who clears the goods for export and for import, and who pays the duties.
- Who must buy cargo insurance, if anyone.
- The exact point where the risk of loss or damage passes from seller to buyer.
Incoterms do not cover transfer of ownership, payment terms, the price, or what happens if the contract is breached. Those belong in the sales contract itself.
How to write an Incoterm in a contract
Use the code, the most precise place you can, and the edition:
DAP 1250 Industrial Ave., Querétaro, Mexico — Incoterms® 2020
A vague place (“DAP Mexico”) leaves room to argue about who pays the last leg. Naming the edition matters because parties may still contract under an older version if they say so.
Incoterms 2026 chart: who pays what
The chart below covers the 11 rules in force. Read each row left to right: blue means the seller is responsible, amber means the buyer is.
| Rule | Export clearance | Main carriage | Insurance | Unloading at destination | Import duties | Risk passes to buyer |
|---|---|---|---|---|---|---|
| Any mode of transport | ||||||
| EXW Ex Works | Buyer | Buyer | — | Buyer | Buyer | At seller’s premises, not loaded |
| FCA Free Carrier | Seller | Buyer | — | Buyer | Buyer | Handed to buyer’s carrier at named place |
| CPT Carriage Paid To | Seller | Seller | — | Buyer* | Buyer | Handed to the first carrier |
| CIP Carriage and Insurance Paid To | Seller | Seller | Seller (Clauses A) | Buyer* | Buyer | Handed to the first carrier |
| DAP Delivered at Place | Seller | Seller | — | Buyer | Buyer | At destination, ready for unloading |
| DPU Delivered at Place Unloaded | Seller | Seller | — | Seller | Buyer | At destination, once unloaded |
| DDP Delivered Duty Paid | Seller | Seller | — | Buyer | Seller | At destination, ready for unloading |
| Sea and inland waterway only | ||||||
| FAS Free Alongside Ship | Seller | Buyer | — | Buyer | Buyer | Alongside the vessel, port of shipment |
| FOB Free On Board | Seller | Buyer | — | Buyer | Buyer | On board the vessel, port of shipment |
| CFR Cost and Freight | Seller | Seller | — | Buyer* | Buyer | On board the vessel, port of shipment |
| CIF Cost, Insurance and Freight | Seller | Seller | Seller (Clauses C) | Buyer* | Buyer | On board the vessel, port of shipment |
* Unloading costs at destination that are included in the seller’s contract of carriage are for the seller’s account. “—” means neither party is obliged to insure; the party bearing the risk usually does.
Download the Incoterms 2026 chart (PDF)
A one-page, print-ready version of the chart for your purchasing, sales and logistics teams.
The four families: E, F, C and D
The first letter of each rule tells you how far the seller’s responsibility goes.
- E — EXW. The seller only makes the goods available at its own premises. The buyer does everything else, including export clearance.
- F — FCA, FAS, FOB. The seller delivers the goods to a carrier chosen and paid by the buyer. The main freight is the buyer’s.
- C — CPT, CIP, CFR, CIF. The seller contracts and pays the main freight, but the risk passes to the buyer at origin, when the goods are handed to the carrier or loaded on the vessel.
- D — DAP, DPU, DDP. The seller bears cost and risk until the goods arrive at the named destination.
Under the E, F and D rules, cost and risk pass at the same point. The C-rules are the exception: the seller keeps paying the freight after the risk has passed to the buyer.
The 11 Incoterms rules, one by one
Seven rules work for any mode of transport. Four were written for ships and should only be used when goods are delivered at a port.
EXW — Ex Works
The seller makes the goods available at its premises, not loaded and not cleared for export. The buyer arranges loading, export formalities, transport, insurance and import.
Use it when: the buyer has its own logistics network in the seller’s country. For international sales FCA is usually safer, because the buyer often cannot clear exports in the seller’s country.
FCA — Free Carrier
The seller clears the goods for export and hands them to the carrier nominated by the buyer at the named place. If that place is the seller’s premises, the seller also loads the truck. Since 2020, the parties can agree that the buyer’s carrier issues an on-board bill of lading to the seller.
Use it when: shipping by truck, rail, air or containers handed over at an inland terminal. It is the most practical F-rule for Mexico–U.S. trucking.
CPT — Carriage Paid To
The seller pays the freight to the named destination, but the risk passes to the buyer when the goods are handed to the first carrier. The seller has no obligation to insure.
Use it when: the seller can negotiate better freight rates but the buyer accepts the transit risk. The buyer should arrange its own insurance.
CIP — Carriage and Insurance Paid To
Same as CPT, plus the seller must buy cargo insurance for the buyer. Under Incoterms® 2020 that insurance must be all-risks cover, ICC Institute Cargo Clauses (A), for at least 110% of the contract value.
Use it when: high-value goods move by air or multimodal transport and the buyer wants the seller to arrange full cover.
DAP — Delivered at Place
The seller delivers the goods to the named destination, ready for unloading. The seller bears all risk and cost until then. The buyer unloads, clears import customs and pays duties and taxes.
Use it when: the seller controls the transport to the buyer’s door but the buyer handles its own import. It is the most common D-rule for shipments into Mexico.
DPU — Delivered at Place Unloaded
The only rule where the seller must unload the goods at destination. Risk passes once the goods are unloaded at the named place. DPU replaced DAT (Delivered at Terminal) in 2020, and the place no longer has to be a terminal.
Use it when: the seller has the equipment and access to unload at the buyer’s site, such as a cross-dock or warehouse.
DDP — Delivered Duty Paid
Maximum responsibility for the seller: transport, risk, import clearance, duties and taxes, until the goods are ready for unloading at the named place. The seller must be able to act as importer of record in the destination country.
Use it when: the seller has a legal entity or registered importer in the destination country. See the Mexico section before quoting DDP into Mexico.
FAS — Free Alongside Ship
The seller places the goods alongside the vessel named by the buyer at the port of shipment, cleared for export. Risk passes at that moment; loading and ocean freight are the buyer’s.
Use it when: shipping bulk or break-bulk cargo, such as grain or heavy machinery. It is not suitable for containers.
FOB — Free On Board
The seller loads the goods on board the vessel nominated by the buyer at the port of shipment and clears them for export. Risk passes once the goods are on board; the buyer pays ocean freight and insurance.
Use it when: the goods are loaded directly onto the ship. For containers handed over at a terminal or depot, use FCA instead.
CFR — Cost and Freight
The seller pays ocean freight to the destination port. Risk still passes when the goods are on board at the port of shipment, so the buyer carries the transit risk.
Use it when: shipping bulk cargo by sea and the buyer insures. For containers, CPT is the better match.
CIF — Cost, Insurance and Freight
Same as CFR, plus the seller buys insurance for the buyer. Under CIF the minimum is ICC Cargo Clauses (C), which covers far less than the Clauses (A) required under CIP.
Use it when: shipping commodities by sea. Buyers of manufactured goods should ask for extra cover or switch to CIP.
Risk vs. cost: where the C-rules catch people out
Under CPT, CIP, CFR and CIF the seller pays the freight to destination, but the buyer takes the risk at origin. If the goods are damaged in transit, the buyer has to claim, even though the seller chose and paid the carrier.
The practical rule: whoever carries the risk should hold the insurance. Under the C-rules that is usually the buyer, except where CIF or CIP oblige the seller to insure on the buyer’s behalf.
Is there an Incoterms 2026?
No. The edition in force in 2026 is Incoterms® 2020, effective since January 1, 2020. There was never an “Incoterms 2021”, “2022” or “2025” edition. The ICC revises the rules roughly once a decade and has begun preparing Incoterms 2030; no draft or launch date has been published.
What changed in Incoterms® 2020
- DPU replaced DAT. Delivery with unloading can now happen at any place, not only a terminal.
- CIP insurance went up. CIP now requires all-risks cover (ICC Clauses A); CIF keeps the minimum Clauses C.
- FCA and the bill of lading. Parties can agree that the buyer’s carrier issues an on-board bill of lading to the seller, which helps with letters of credit.
- Own transport allowed. Under FCA, DAP, DPU and DDP, the buyer or seller may use its own vehicles instead of a third-party carrier.
- Security costs. Each rule now states who pays security-related requirements and costs.
Can I still use older Incoterms?
Yes, if the contract names the edition, for example “FOB Manzanillo, Incoterms® 2010”. But rules that were retired, such as DDU, DAF, DES, DEQ (removed in 2010) or DAT (removed in 2020), create confusion with carriers, banks and customs. For new contracts, use Incoterms® 2020.
Incoterms for Mexico–U.S. trade
Most freight between Mexico and the United States moves by truck, so the sea-only rules (FAS, FOB, CFR, CIF) rarely fit. These are the rules that work at the border:
- FCA (seller’s plant or a border city). The seller clears the goods for export and hands them to the buyer’s carrier, for example FCA Nuevo Laredo, Tamaulipas or FCA Laredo, Texas. Clear and fair for both sides.
- DAP (buyer’s plant). The seller manages the full move, including the border crossing, and the buyer’s customs broker clears the import. Common for U.S. suppliers selling into Mexican plants.
- DDP — only with an importer of record. Imports into Mexico are filed on a pedimento through a licensed Mexican customs broker, and the importer must be registered in Mexico’s importer registry (Padrón de Importadores) with a Mexican tax ID (RFC). A foreign seller without a Mexican entity usually cannot do that, so DAP is the safer choice. Into the U.S., a non-resident company can act as importer of record, so DDP is easier to arrange.
“FOB” on a truck shipment usually does not mean Incoterms FOB. In U.S. domestic contracts, “FOB Origin” and “FOB Destination” are domestic shipping terms. For cross-border trucking, write FCA or DAP with a precise place and “Incoterms® 2020” to avoid two different readings of the same three letters.
Two more points for cross-border shipments: the Incoterm does not decide whether goods qualify for duty-free treatment under USMCA (that depends on the rules of origin and the certification; see our USMCA shipping guidelines), and products regulated by Mexican standards need NOM compliance whatever rule you choose (NOM compliance guide).
For a deeper look at which rule to quote on each lane, read our guide to Incoterms for U.S.–Mexico trade.
Moving freight between Mexico and the U.S.?
ILS handles cross-border trucking, freight forwarding and warehousing in Querétaro, Hermosillo and Tucson. Tell us your lane and Incoterm and we will quote the full move.
Six common Incoterms mistakes
- Using FOB or CIF for trucks, air freight or containers. These rules are for goods loaded directly onto a ship. Use FCA, CPT or CIP instead.
- Naming a vague place. “DAP Mexico” or “FCA USA” invites disputes about the last mile. Give a full address or a specific terminal.
- Quoting DDP without being able to import. If you cannot act as importer of record in the destination country, you cannot deliver duty paid.
- Assuming CIF insurance is enough. Clauses (C) covers major casualties only. Check the policy or ask for Clauses (A).
- Treating the Incoterm as the whole contract. It does not set payment terms, transfer title or define penalties.
- Not naming the edition. Always add “Incoterms® 2020” so nobody applies retired rules like DDU or DAT.
U.S. import filing: ISF “10+2” and truck e-Manifest
Incoterms decide who files, but U.S. Customs and Border Protection (CBP) decides what must be filed.
Ocean cargo: Importer Security Filing (10+2)
For ocean shipments arriving in the United States, the importer (or its agent) must send CBP ten data elements at least 24 hours before the cargo is loaded on the vessel at the foreign port. The carrier sends two more: the vessel stow plan and container status messages.
The ten importer elements are:
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Buyer (or owner) name and address
- Ship-to name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Importer of record number or foreign trade zone applicant ID
- Consignee number(s)
- Country of origin
- Commodity HTSUS number (6 digits)
Under F-rules and EXW the buyer usually handles the ISF; under DDP the seller does. Details on the CBP ISF page.
Truck cargo from Mexico: ACE e-Manifest
ISF does not apply to trucks. Carriers crossing from Mexico must send an electronic manifest through CBP’s ACE system at least one hour before reaching the U.S. port of entry, or 30 minutes for FAST participants.
Freight and customs glossary
Show the glossary
- ACE
- Automated Commercial Environment: CBP’s system for import and export filings, including manifests and entries.
- ABI
- Automated Broker Interface: the ACE channel customs brokers use to file entries.
- AES / EEI
- Automated Export System: where U.S. exporters file Electronic Export Information (EEI), which replaced the paper Shipper’s Export Declaration.
- Agente aduanal
- Licensed Mexican customs broker who files the pedimento.
- AMS
- Automated Manifest System: the CBP module carriers use to transmit cargo manifests.
- BAF / BSC
- Bunker Adjustment Factor / Bunker Surcharge: fuel-price adjustment on ocean freight.
- BL / HBL
- Bill of Lading / House Bill of Lading issued by a forwarder or NVOCC.
- Break-bulk
- Packaged cargo moved by ocean that is not containerized.
- Bulk
- Homogeneous cargo stowed loose in the ship’s hold.
- CAF
- Currency Adjustment Factor.
- CFS
- Container Freight Station, where LCL cargo is consolidated or deconsolidated.
- CSC
- Container Service Charge.
- CY/CY
- Container Yard to Container Yard.
- Drayage
- Short-haul truck move, such as across the border between Nuevo Laredo and Laredo.
- DTD / DTP / PTP
- Door to Door / Door to Port / Port to Port.
- EDI
- Electronic Data Interchange.
- e-Manifest
- Electronic truck manifest filed in ACE before arriving at a U.S. land border.
- ETA / ETD
- Estimated Time of Arrival / Departure.
- FAF / FSC
- Fuel Adjustment Factor / Fuel Surcharge.
- FAK
- Freight All Kinds: a single rate for mixed commodities.
- FAST
- Free and Secure Trade: CBP program for pre-approved commercial truck carriers and drivers.
- FCL / LCL
- Full Container Load / Less than Container Load.
- FTL / LTL
- Full Truckload / Less than Truckload.
- GRI / GRR
- General Rate Increase / General Rate Restoration.
- HTSUS
- Harmonized Tariff Schedule of the United States.
- IMMEX
- Mexican program for temporary duty-free import of inputs used in export manufacturing.
- IOR
- Importer of Record: the party legally responsible for an import.
- ISF
- Importer Security Filing (“10+2”) for ocean cargo bound for the U.S.
- NVOCC
- Non-Vessel Operating Common Carrier.
- OTI
- Ocean Transportation Intermediary.
- Pedimento
- Mexican customs declaration for imports and exports.
- PPS
- Pier Pass Surcharge.
- PSS / PSA
- Peak Season Surcharge / Peak Season Adjustment.
- RFC
- Registro Federal de Contribuyentes: Mexican tax ID, required to import.
- TEU
- Twenty-foot Equivalent Unit, used to measure container capacity.
- THC
- Terminal Handling Charges.
- Transloading
- Transferring cargo between trailers or modes, common at the border.
- TRC
- Terminal Receiving Charges.
- USMCA
- United States–Mexico–Canada Agreement (T-MEC in Mexico).
Other charges you may see: clean truck fee, handling charges, security fee, courier fee.
Incoterms FAQ
What are the 11 Incoterms?
EXW, FCA, CPT, CIP, DAP, DPU and DDP, which work for any mode of transport, plus FAS, FOB, CFR and CIF, which are for sea and inland waterway transport only.
Is there an Incoterms 2026?
No. In 2026 the edition in force is Incoterms® 2020. The ICC has started work on the next edition, expected to be called Incoterms 2030.
What is the difference between FOB and FCA?
Under FOB the risk passes when the goods are on board the ship, so it only fits sea shipments loaded directly onto a vessel. FCA passes the risk when the goods are handed to the buyer’s carrier, so it works for trucks, air freight and containers.
Who pays import duties under DAP?
The buyer. Under DAP the seller delivers to the named place, ready for unloading, and the buyer clears import customs and pays duties and taxes. Only under DDP does the seller pay them.
Which Incoterm should I use for trucking from Mexico to the U.S.?
Usually FCA, at the seller’s plant or a border city, or DAP at the buyer’s facility. Avoid FOB and CIF, which are sea-only rules.
Can I still use Incoterms 2010?
Yes, if the contract says “Incoterms® 2010”. For new contracts, use the current edition, Incoterms® 2020.
Questions about Incoterms?
Our team works with Incoterms on every cross-border shipment. Send us a message below or call 1-800-ILS-9712.