How we trade · delivery terms

Incoterms 2020, applied plainly.

Incoterms® 2020 are the ICC's eleven standard delivery terms. They set who carries cost, risk and obligation between seller and buyer. They do not decide title or payment: title follows the contract, payment follows the agreed instrument. These are the eight rules Torix works with most.

The rules · 01

Eight terms, compared.

FOB, CFR and CIF are sea and inland-waterway rules. FCA, CPT and CIP are often the better fit for containerised or multimodal shipments. Every Torix contract states the named port or place and "Incoterms® 2020".

Term
Mode
Risk transfers
Freight & insurance
Typical use
EXWEx Works
Any mode
At the factory
Buyer arranges all
Buyer collects from factory, rare in cross-border solar supply.
FCAFree Carrier
Any mode
Handover to carrier
Buyer's freight & insurance
Containerised origin delivery, often the technically correct alternative to FOB for containers.
FOBFree On Board
Sea only
Goods on board vessel
Buyer's freight & insurance
Buyer controls the ocean leg with their own forwarder.
CFRCost & Freight
Sea only
On board at origin
Seller pays freight · buyer insures
Seller books the vessel; buyer holds its own cargo cover.
CPTCarriage Paid To
Any mode
Handover to first carrier
Seller pays carriage · buyer insures
Multimodal carriage arranged by the seller.
CIPCarriage & Insurance Paid To
Any mode
Handover to first carrier
Seller pays carriage + insurance
Multimodal with seller-arranged cover, note CIP's default insurance level is higher than CIF's.
DAPDelivered At Place
Any mode
At the named destination place
Seller's carriage · import duty buyer's
Delivery to an agreed destination place, agreed case by case.
The fine print · 02

"CIF is not 'landed cost'. Risk moves at origin, and duty is never included."

Four points buyers most often get caught on: CIF does not include import duty, destination duties and taxes are always the importer's. CIF risk transfers at origin, when the goods are on board, even though the seller pays freight to the destination port. FOB on containers leaves a gap between the container yard and the ship's rail, FCA is often the cleaner rule. And DDP is not a standard Torix offer, we are not the importer of record in your market.

Which rule fits depends on who controls freight, who carries the insurance relationship, and how your customs entry is structured. State the preference in the RFQ and the quotation comes back on that basis, with the named port or place written into the contract.

Incoterms® is a registered trademark of the International Chamber of Commerce. This page is operational guidance, not legal advice.

State the basis

Tell us the term, we quote on it.

FOB, CFR, CIF, FCA, CPT, CIP or DAP, name the rule and the port or place in your RFQ, and the quotation returns on that basis with the document set to match.