Importer view
How to read risk and cost as an importer
As an importer, translate every term into three answers: who books main freight, when risk transfers to you, and who clears import and pays duty. The interactive tool above maps each Incoterms 2020 code onto a simple risk timeline from seller premises → carrier → origin port → destination place → duty-paid delivery.
Freight prepaid vs freight collect is only a cost-allocation idea. It does not replace naming the correct Incoterm in the contract—or scoping your freight quote as port-to-port, door-to-door, or true DDP shipping from China.
Limits
What Incoterms do not cover
- Payment method or credit terms
- Title/ownership transfer (unless the contract says so)
- Product quality, warranty, or intellectual property
- All possible destination fees (unless the term and service scope explicitly include them)
- Which party must buy insurance—except where the rule requires it (CIF and CIP)
Documents
Documents still required under any Incoterm
Commercial invoice
Value, parties, and the Incoterm stated on the invoice should match the contract.
Packing list
Piece/weight evidence for handover and inspection—must reconcile with the transport document.
B/L or AWB
Proves carriage; consignee/notify party must match who can take delivery.
Export declaration
Seller side under most terms; EXW creates practical friction on China exports.
Import entry & duty payment
Buyer under most terms; seller under true DDP only when executable.
Insurance certificate
Mandatory seller interest under CIF/CIP minimums; otherwise a contract decision.
Full library: Shipping documents from China
Mistakes
Common Incoterms mistakes when buying from China
- ✕Writing FOB for container handoff that actually happens at a terminal (consider FCA)
- ✕Assuming CIF includes all destination charges
- ✕Treating DDP as “door delivery” without duty capability
- ✕Leaving the Incoterm off the commercial invoice
- ✕Mixing sea-only terms with pure air shipments
Related: FOB shipping point vs destination · CNF shipping explained · DDP shipping from China · Door-to-door shipping from China · Sea freight from China · Air freight from China
Reference chart
Incoterms 2020 responsibilities chart (static)
Fallback table for SEO and no-JS users. Prefer the interactive matrix above for filtering and comparison.
| Term | Mode | Main freight | Risk transfers | Export | Import duty | Best when you… |
|---|---|---|---|---|---|---|
| EXW Ex Works | Any / multimodal | Buyer | When goods are placed at the buyer’s disposal at seller’s premises | buyer | Buyer | You can fully control export and main freight—and accept early risk transfer. |
| FCA Free Carrier | Any / multimodal | Buyer | When goods are handed to the carrier at the named place | seller | Buyer | You want control of main freight after a clean China handoff with seller export clearance. |
| CPT Carriage Paid To | Any / multimodal | Seller | When goods are handed to the first carrier | seller | Buyer | Seller can book multimodal freight to destination, but you still clear import and may buy insurance. |
| CIP Carriage and Insurance Paid To | Any / multimodal | Seller | When goods are handed to the first carrier | seller | Buyer | Seller books multimodal freight and must provide insurance under Incoterms 2020 rules—you still clear import. |
| DAP Delivered at Place | Any / multimodal | Seller | When goods are placed at the buyer’s disposal at the named place, ready for unloading | seller | Buyer | You want seller delivery to your site/terminal, but you will clear import and pay duty. |
| DPU Delivered at Place Unloaded | Any / multimodal | Seller | When goods are unloaded at the named place of destination | seller | Buyer | You want seller to deliver and unload at the named place, while you still clear import and pay duty. |
| DDP Delivered Duty Paid | Any / multimodal | Seller | When goods are placed at the buyer’s disposal at the named place, cleared for import | seller | Seller (DDP) | You need duty-paid delivery and the seller/forwarder can actually clear and pay duty in your country. |
| FAS Free Alongside Ship | Sea only | Buyer | When goods are placed alongside the vessel at the named port of shipment | seller | Buyer | Conventional sea movements where goods are delivered alongside the ship (not typical container terminal handoff). |
| FOB Free On Board | Sea only | Buyer | When goods are on board the vessel at the named port of shipment | seller | Buyer | True sea/waterway shipments where on-board vessel delivery is accurate—and you want to control ocean freight. |
| CFR Cost and Freight | Sea only | Seller | When goods are on board the vessel at origin | seller | Buyer | Seller includes ocean freight to destination port, but you still handle insurance and import. |
| CIF Cost, Insurance and Freight | Sea only | Seller | When goods are on board the vessel at origin | seller | Buyer | Seller includes ocean freight plus minimum insurance to destination port—you still clear import and face many destination charges. |
*EXW export formalities are buyer’s under the rule; China practice often needs seller cooperation—FCA is frequently cleaner.
FAQ
Frequently asked questions
What are Incoterms 2020?
What is the difference between FOB and FCA?
Does DDP include customs clearance?
Which Incoterm is best for the buyer from China?
Do Incoterms decide who pays all destination fees?
Choosing terms is only half the job
Align the Incoterm with a scoped freight plan—then quote air, sea, rail, or door/DDP against the same destination.
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