Incoterms 2020 Beginner's Complete Guide

Incoterms 2020 are standardized trade terms that define cost, risk, and responsibility boundaries between buyers and sellers. EXW requires the seller only to make goods available at origin; the buyer handles everything else. FOB transfers risk when goods pass the ship's rail at the origin port, with the seller covering inland and export clearance. CIF includes freight and insurance to the destination port but transfers risk at origin. DAP means the seller delivers to a named destination, excluding import duties. DDP requires the seller to cover all costs including duties. Choosing the right term depends on both parties' logistics capability, market knowledge, and negotiation position. Always include a specific named place with each term to avoid ambiguity.