14 October 2026
Incoterms® 2020 in Plain English: Who Pays, Who Insures, Who Clears Customs?
EXW, FCA, FOB, CIF, DAP, DDP and more — the eleven Incoterms rules explained simply, with tips for importers and exporters in Azerbaijan.
Incoterms® rules, published by the International Chamber of Commerce, define where the seller’s responsibility ends and the buyer’s begins: who arranges transport, who pays for it, who carries the risk and who clears customs. The current version is Incoterms® 2020.
Rules for any mode of transport
- EXW — Ex Works: the buyer collects the goods at the seller’s premises and handles almost everything.
- FCA — Free Carrier: the seller hands the goods, cleared for export, to the buyer’s carrier.
- CPT — Carriage Paid To: the seller pays transport to the destination; risk passes at handover to the first carrier.
- CIP — Carriage and Insurance Paid To: as CPT, plus insurance arranged by the seller.
- DAP — Delivered at Place: the seller delivers to the named place, ready for unloading.
- DPU — Delivered at Place Unloaded: as DAP, but the seller also unloads.
- DDP — Delivered Duty Paid: the seller delivers, cleared for import with duties paid.
Rules for sea and inland waterway transport
- FAS — Free Alongside Ship
- FOB — Free on Board
- CFR — Cost and Freight
- CIF — Cost, Insurance and Freight
Practical tips
- Always name the place precisely — “FCA Baku, warehouse address” — not just the term.
- Check who is responsible for import clearance; under most terms it is the buyer.
- Match insurance to the risk you carry.
- For containers, FCA is often a better fit than FOB.
Viking Group can insure your freight from any port and under any International Commerce Terms, and handles customs clearance for importers and exporters. See Customs Brokerage.