Incoterms 2020 Explained: EXW, FCA, FOB, CIF, DAP and DDP
Incoterms 2020 explained for buyers and sellers trading with Turkey: the four groups, all 11 terms with transport mode, risk transfer point and who pays freight, and which term suits each shipment.
Incoterms 2020 are the 11 standard delivery terms published by the International Chamber of Commerce (ICC) that define, between buyer and seller, the point of delivery, the split of costs and the moment at which risk passes. They mean the same thing in contracts everywhere, so who pays the freight, who insures and who bears the loss in transit is settled by a single three-letter code.
This guide puts all 11 Incoterms 2020 terms, their risk transfer points and who pays the main carriage into one table, then shows which term to choose for road, sea and rail shipments when you buy from a Turkish supplier or export from Turkey, and where the most common mistakes are made.
What Incoterms 2020 are and why they matter
A price on its own means little in an international sales contract: FOB Mersin and DAP Almaty at the same unit price differ by the full freight, insurance and customs cost. The term states up to which point the price applies and where cost and risk pass to the buyer.
Incoterms govern only the relationship between seller and buyer; the carriage contract, transfer of ownership and payment terms must be settled separately. Compared with the previous edition, Incoterms 2020 replaced DAT with DPU, widened the insurance cover under CIP and allowed an on-board bill of lading under FCA.
Incoterms 2020 table: all 11 terms
The table shows each term's group, permitted transport modes, the point at which risk passes from seller to buyer and who pays the main carriage.
| Term | Group | Transport mode | Risk transfer point | Who pays freight |
|---|---|---|---|---|
| EXW (Ex Works) | E | Any mode | At the seller's premises, when placed at the buyer's disposal | Buyer |
| FCA (Free Carrier) | F | Any mode | When handed to the buyer's carrier at the named place | Buyer |
| CPT (Carriage Paid To) | C | Any mode | When handed to the first carrier | Seller (to the named destination) |
| CIP (Carriage and Insurance Paid To) | C | Any mode | When handed to the first carrier | Seller, plus all-risks insurance |
| DAP (Delivered at Place) | D | Any mode | Named destination, on the arriving vehicle, ready for unloading | Seller |
| DPU (Delivered at Place Unloaded) | D | Any mode | Named destination, once unloaded | Seller (unloading included) |
| DDP (Delivered Duty Paid) | D | Any mode | Named destination, import duties paid | Seller (duties included) |
| FAS (Free Alongside Ship) | F | Sea and inland waterway | When placed alongside the vessel at the port of loading | Buyer |
| FOB (Free on Board) | F | Sea and inland waterway | When loaded on board at the port of loading | Buyer |
| CFR (Cost and Freight) | C | Sea and inland waterway | When loaded on board at the port of loading | Seller (to the port of destination) |
| CIF (Cost, Insurance and Freight) | C | Sea and inland waterway | When loaded on board at the port of loading | Seller, plus minimum-cover insurance |
The most critical distinction is in group C: under CPT, CIP, CFR and CIF the seller pays the freight, but risk passes to the buyer as soon as the goods are handed to the first carrier or loaded on board. Buyers who miss this point expect compensation from the seller after transit damage and are disappointed.
The four groups: E, F, C and D terms
Group E: EXW
EXW places the least obligation on the seller: delivery takes place at the seller's premises, and loading, export customs, transport and insurance fall to the buyer. Because a foreign buyer cannot easily file the export declaration in Turkey, FCA is usually the healthier choice when buying from a Turkish supplier.
Group F: FCA, FAS, FOB
In group F the seller clears export customs and hands the goods to the carrier nominated by the buyer; the buyer pays the main carriage. FCA works for any mode and suits container shipments better than FOB, because a container is delivered to the port terminal, not onto the ship. FOB and FAS are sea-only terms.
Group C: CPT, CIP, CFR, CIF
In group C the seller arranges the main carriage and pays the freight, but risk passes early. Under CIF and CIP the seller also insures the goods; Incoterms 2020 requires all-risks cover for CIP and minimum cover for CIF.
Group D: DAP, DPU, DDP
In group D the seller carries the goods to the named point in the destination country and risk passes there. Under DAP the goods are delivered on the vehicle ready for unloading; under DPU the seller also unloads; under DDP the seller clears import customs and pays the duties as well, which may create a tax registration requirement in the destination country.
Which term suits which shipment?
For industrial goods by road from Antalya to Germany, FCA and DAP are the most common options: FCA Antalya if the buyer uses its own carrier, DAP Munich if the seller organises the transport and includes it in the price. On the road, delivery to the carrier is evidenced by the CMR consignment note.
For containers by sea to China, FOB Mersin or CIF Shanghai are the classic choices, although for container cargo the ICC recommends FCA instead of FOB and CIP instead of CIF, since risk passing on delivery to the terminal is clearer than at loading on board.
For Central Asia by road or rail, DAP Almaty or DAP Tashkent are frequent: the seller organises the transport while import customs and duties stay with the buyer. Choose DDP only if you can manage customs and tax procedures in the destination country with confidence.
The term also shapes the paperwork: CIF requires an insurance policy, FOB an on-board bill of lading. The freight forwarder and licensed customs broker handling the export side in Turkey should know the term before the documents are prepared; our guides to choosing a freight forwarder in Turkey and a logistics company in Antalya help you pick that partner.
Risk transfer, insurance and common mistakes
Under Incoterms 2020 risk and cost do not always transfer at the same point: in group C the seller carries the cost to the destination while risk sits with the buyer from departure. An importer buying on CFR or CPT terms should therefore take out its own cargo insurance, since the carrier's liability under CMR or a bill of lading is limited and does not reflect the real value of the goods.
- Leaving out the place name: FOB on its own is incomplete; write FOB Mersin Port, Incoterms 2020.
- Using FOB or CIF for container cargo and not knowing who carries the risk while the box waits at the terminal.
- Not stating in the contract in whose name the export declaration is filed under EXW.
- Quoting DDP without including destination VAT and import duty in the price.
- Not naming the edition: older contracts may still quote the previous edition.
Customs and tax practices should be confirmed against current regulations and destination-country rules. For FTL, LCL, bill of lading and other terms used alongside Incoterms, see our freight and logistics glossary.
Regulations and border procedures change over time; confirm the current requirements with the International Chamber of Commerce and with your forwarder before you book.
Frequently asked questions
How many terms are there in Incoterms 2020?
There are 11 in total. Seven (EXW, FCA, CPT, CIP, DAP, DPU, DDP) apply to any mode of transport and four (FAS, FOB, CFR, CIF) only to sea and inland waterway transport.
What is the difference between FOB and CIF?
Under both, risk passes to the buyer when the goods are loaded on board. The difference is in cost: under FOB the buyer pays freight and insurance; under CIF the seller pays freight to the port of destination and buys minimum-cover insurance.
Who pays the freight?
In groups E and F (EXW, FCA, FAS, FOB) the buyer pays the main carriage. In groups C and D (CPT, CIP, CFR, CIF, DAP, DPU, DDP) the seller pays the freight and includes it in the sales price.
Which Incoterms term should be used for container shipping?
The ICC recommends FCA instead of FOB, CPT instead of CFR and CIP instead of CIF, because a container is delivered to the port terminal, not onto the ship, so the terminal is the clearer risk-transfer point.
BNK Lojistik, based in Muratpaşa, Antalya, plans road, sea and rail transport in line with the delivery term you choose and works through the FTL, LTL, FCL and LCL options for your FCA, CIF or DAP shipments to Europe, Russia, Central Asia and China with you. For your cargo, contact us through the quote form.
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