At a Glance 

11 rules │ 7 any-mode + 4 sea-only │ Current since 1 Jan 2020 │ No Incoterms 2023 or 2025 │ Next revision ~2030

Incoterms 2020 are the 11 international trade rules published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international shipping contracts. They took effect on 1 January 2020 and remain the current version: there is no Incoterms 2023 or Incoterms 2025. Each rule sets out who pays for transport, where risk passes, who handles customs, and who arranges insurance. This guide covers all 11 rules, the key changes from 2010, and the comparisons that cause the most confusion.

What Are Incoterms?

Incoterms, short for International Commercial Terms, are a standardized set of rules published by the International Chamber of Commerce (ICC) since 1936. They appear in international sales contracts to assign specific responsibilities between buyer and seller, and the ICC revises them roughly every ten years. Importantly, Incoterms are not laws; they are voluntary contractual frameworks adopted globally. For the underlying vocabulary, see the language of Incoterms. In practice, Incoterms define:

• Who pays for transport at each stage of the journey
• Where risk transfers from seller to buyer
• Who is responsible for import and export customs formalities
• Who is responsible for insurance, according to certain rules only

Is Incoterms 2020 Still Valid? (There Is No 2023 or 2025)

Yes. Incoterms 2020 is the current version and remains in force. There are no Incoterms 2023 and no Incoterms 2025, despite frequent searches for both.

The ICC updates Incoterms approximately every decade. Past editions appeared in 1936, 1953, 1967, 1976, 1980, 1990, 2000, 2010, and 2020, and the next revision is expected around 2030. Older versions such as Incoterms 2010 can still be used in a contract if they are explicitly referenced, which is exactly why the version must always be named. When drafting a contract, state it in full, for example “FCA Rotterdam (Incoterms 2020)”.

The 11 Incoterms 2020 Rules: The Full List

The 11 Incoterms 2020 rules are divided into two categories by transport mode.

Any mode of transport (7 rules):

What Changed Between Incoterms 2010 and 2020

Incoterms 2020 introduced five substantive changes from the 2010 edition:

• DAT became DPU. Delivered at Terminal was renamed Delivered at Place Unloaded, broadening the rule beyond terminals to any unloaded destination point.
• CIP insurance was raised. Minimum cover was upgraded to Institute Cargo Clauses (A), the most comprehensive level, while CIF retained the lower Clauses (C).
• FCA gained an on-board bill-of-lading option. Sellers can now have the carrier issue an on-board bill of lading after loading, which buyers can present to banks under letter-of-credit terms.
• Carriage by one’s own means is recognized. FCA, DAP, DPU, and DDP now explicitly allow the seller or buyer to use their own vehicles rather than a third-party carrier.
• Security obligations were added. Security-related requirements, such as ISPS screening, are now explicitly assigned within carriage cost and obligation provisions.
  

  The 11 Rules Explained, One by One

  Each rule below follows the same pattern: what it means, where risk transfers, and where cost transfers.

Comparing the Major Rules: FOB vs DDP, FCA vs FOB, CIF vs CIP

Three comparisons account for most Incoterms confusion. Use them to find the rule that fits your shipment.

FOB vs DDP

FOB puts the buyer in charge of ocean transit and import customs, while DDP shipping puts the seller fully in charge through to destination. FOB suits experienced buyers with strong destination logistics; DDP suits buyers entering new markets or without local entities. Under DDP, the seller pays the tariffs, and the most common pitfall is a seller without local IOR registration facing customs blocks.

FCA vs FOB

Both transfer risk early, but FCA works for any transport mode, while FOB applies only to sea and inland waterway. FCA also handles containerized cargo more practically, so most modern container shipments should use FCA rather than FOB.

CIF vs CIP

Both require the seller to arrange insurance, but CIP now requires the highest level of cover (Institute Cargo Clauses A), while CIF still requires only the minimum (Institute Cargo Clauses C). CIP applies to any mode of transport; CIF applies only to sea and inland waterway transport.

How Incoterms 2020 Decide Who Handles Customs and Acts as IOR

The Incoterm chosen determines which party acts as Importer of Record (IOR) and pays import duties:

• Seller-led (DDP). The seller, or an appointed IOR service, registers as Importer of Record and pays import duties at destination. This matters most for foreign sellers shipping to the US, the EU, or the Middle East.
• Buyer-led (EXW, FCA, FOB, CIF). The buyer is the IOR and handles the import customs declaration and duties.
• Hybrid (DAP, DPU). The seller arranges transport to the destination, but the buyer remains the IOR. Mismatching the Incoterm with IOR responsibility is one of the most common causes of customs holds.

What Incoterms 2020 Do Not Cover, and How to Use Them in Contracts

Incoterms 2020 are powerful, but they do not cover everything in a sales contract. They leave out:

• Transfer of title or ownership of the goods
• The price of the goods or the payment terms
• What happens if a party fails to perform
• Intellectual property rights

When using Incoterms in contracts, follow these practices:

• Name the specific version, for example “FCA Rotterdam (Incoterms 2020)”
• Specify the named place precisely, whether a port, terminal, or full address
• Align the Incoterm with your insurance, IOR setup, and customs strategy before signing, alongside the right freight documents
• Train procurement and finance teams, since the wrong Incoterm can shift cost by 3% to 15% of shipment value

Shipping Under Incoterms 2020? GCE Can Help

GCE Logistics manages international shipments under all major Incoterms 2020, including full IOR and customs compliance for DDP, as well as freight forwarding under FOB, CIF, and FCA. With 25+ years on EU and Middle East trade lanes, our team helps you match the right term to your customs and insurance strategy before you sign.

Set up IOR for DDP shipments  or  Talk to a Freight Expert.

Frequently Asked Questions