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Incoterms 2026: Meaning, Chart & List Of Incoterms

Published

3 mois ago

8 juillet 2026

If you are shipping goods, knowing your incoterms is essential to understanding who is responsible for what in your supply chain.

Read on to learn all about incoterms and how to choose the right one for your shipment.

Incoterms in Plain English: The Incoterms Guide for Freight Shipping

What are Incoterms?

Freight incoterms (International Commercial Terms) are the standard terms used in sales contracts for importing and exporting. They are used to define responsibility and liability for goods over the course of a shipment. In other words, they spell out when responsibility for the goods transfers from the supplier to the buyer. They also define who pays which costs for the goods and their transport.

How Incoterms Impact Your Shipping Cost

You can use our freight rate calculator to help you decide how different incoterms will impact your freight cost. For example, when shipping EXW, you’ll be responsible for the added cost of getting your goods from your supplier to the seaport or airport. Simply choose container, box, or pallet shipping, enter your dimensions and weight, and you’ll get an instant estimate of freight shipping costs.

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List of All 11 Incoterms

EXW – Ex Works: The seller’s responsibility is to make the goods available for pickup at the warehouse or factory. From that point forward, the buyer assumes responsibility for all costs and risks. For most importers and exporters, this means working with a freight forwarder that arranges the entire shipment, starting at pickup from the factory.
FCA – Free Carrier: The seller is responsible for delivering the goods to the carrier at a named place, which is usually the terminal or a warehouse. Once the goods are handed over to the carrier, the risk transfers to the buyer.
CPT – Carriage Paid To: The seller is responsible for the costs of transporting the goods to a named destination. Responsibility transfers to the buyer once the goods are delivered to the agreed-upon destination.
CIP – Carriage and Insurance Paid To: This incoterm is the same as CPT except that with CIP, the seller much also arrange and pay for insurance coverage in case of loss or damage to the goods during transit to the agreed-upon destination.
DAP – Delivered at Place: The seller is responsible for arranging the entire shipment up to delivering the goods to a named place. Risk transfers to the buyer upon delivery. The seller is responsible for clearing goods for export but the buyer assumes responsibility for import customs duties, fees, and taxes.
DPU – Delivered at Place Unloaded: The seller is responsible arranging the shipment and delivering the goods to a named place. They are also responsible for unloading them. Risk transfers to the buyer once the goods are unloaded.
DDP – Delivered Duty Paid: The seller is responsible for entire shipment, including customs clearance and fees, and delivering the goods to the buyer’s premises. This incoterm places the maximum responsibility on the seller.
FAS – Free Alongside Ship: The seller is responsible for picking up the goods at the factory, clearing them for export, and delivering them to a departure location, usually the ship loading dock. Tisk transfers to the buyer when the goods are placed alongside the ship; they are responsible for the main leg of transit and every other step in delivery.
FOB – Free On Board: The seller is responsible for packaging, pickup, and delivery of goods onto a vessel at the port of shipment. Liability transfers to the buyer once the goods are on board the vessell; the buyer is responsible for every other step of the journey.
CFR – Cost and Freight: The seller is responsible for transportation to the port of origin and for loading the goods onto the vessel. They are also responsible for transportation to the destination port – but they are not liable for that portion of the journey. Instead, risk transfers to the buyer when the goods are on boarded at the origin port.
CIF – Cost, Insurance, and Freight: Similar to CFR, but the seller also arranges and pays for insurance coverage for the goods during transit to the port of destination.

2020 Incoterms

The 2020 Incoterms, updated from the 2010 Incoterms, are a set of international trade terms that define the responsibilities and obligations of buyers and sellers when shipping goods. They are designed to facilitate smooth and efficient international trade by providing standardized rules for the delivery of goods, payment, risk transfer, and other key aspects of international transactions.

2020 Incoterms Rules for Any Mode of Transport

Whatever mode of transport you use – sea, air, road, or rail – you’ll need to choose your incoterm. However, not every incoterm can be used for every mode.

The following seven incoterms can be used for both ocean and air shipping:

EXW – Ex Works
FCA – Free Carrier
CPT – Carriage Paid To
CIP – Carriage and Insurance Paid To
DAP – Delivered at Place
DPU – Delivered at Place Unloaded
DDP – Delivered Duty Paid

2020 Incoterms for Sea and Inland Waterway Transport

These four incoterms can be used for sea and inland waterway shipments only:

FAS – Free Alongside Ship
FOB – Free On Board
CFR – Cost and Freight
CIF – Cost, Insurance, and Freight

2010 Incoterms

The International Chamber of Commerce (ICC) updates incoterms every ten years or so. Prior to 2020, the last update was in 2010. The 2010 version was largely similar to the 2020 version.

However, in 2020 some changes and clarifications were made to better reflect modern trade practices and technology.

Using 2010 Incoterms After 2020

It is generally advisable to use the most current set of Incoterms – that is, the 2020 Incoterms. These updated terms are designed to reflect modern trade practices and provide more clarity and specificity, which can help reduce misunderstandings and disputes in international trade.

However, it is not prohibited to use the 2010 Incoterms if both the buyer and seller agree to do so.

It’s essential to clearly specify in the sales contract which set of Incoterms is being used to avoid any confusion or disputes.

2020 Incoterms vs. 2010 Incoterms

Here are some differences between the 2020 Incoterms and the 2010 Incoterms:

Introduction of DPU: In 2020, the DPU (Delivered at Place Unloaded) incoterm replaced DAT (Delivered at Terminal). DPU allows for delivery at a specific place, not just at a terminal, providing more flexibility.
Insurance in CIP and CIF: The 2020 Incoterms clarify that in CIP (Carriage and Insurance Paid To) and CIF (Cost, Insurance, and Freight), the seller is responsible for obtaining insurance coverage with minimum coverage. In the 2010 Incoterms, this was not explicitly stated.
Different Levels of Security Obligations: The 2020 Incoterms include more detailed security-related obligations, aimed at addressing increased security concerns in international trade.
Bill of Lading with FCA: The 2020 Incoterms allow the use of the FCA term in conjunction with a bill of lading. In the 2010 Incoterms, FCA was typically associated with multimodal transport and not used with a bill of lading.

Incoterms for Air Freight

Incoterms commonly used for air shipments are:

EXW (Ex-works), in which the buyer assumes responsibility at the seller’s warehouse and takes care of everything including transportation and insurance.

CIP (Carriage and insurance), which puts responsibility for insurance on the seller.

CPT (Carriage Paid To), in which the seller delivers the goods and covers all fees involved in delivering the goods to the named destination. After delivery, the buyer assumes responsibility.

DDP (Delivered Duty Paid), which puts most obligations on the seller. They carry all the costs and risks of transport, insurance, and customs clearance. This is the only incoterm that lists the seller as the importer of record at destination.

DAP-Delivered At Place, where the seller covers the costs involved in main carriage but is not responsible for customs clearance.

These Incoterms can be adapted for air freight transactions, ensuring that responsibilities and costs are clearly defined between the parties involved in the trade.

Why are Incoterms Important in 2026?

Importers and exporters should consider which incoterms is best for them before the contract of sale is negotiated. This can prevent surprise costs and unnecessary complications.

Choosing an incoterm means getting on the same page as your supplier – it aligns everyone on shipping procedures when multiple parties and stakeholders are involved. These globally accepted terms ensure the timely payment of goods, services, and duties, while protecting suppliers, carriers, and buyers.

Incoterms Chart and List

Check out this quick reference chart of Incoterms and the breakdown of whether the buyer or seller is responsible for what at various points in the international supply chain.

Download this chart now

What Incoterms Should I Use?

Here are some of the most common incoterms and when you might choose them:

FOB (Free on Board)
This very common incoterm is for sea freight only, and means that liability and responsibility for cost transfer to the buyer when the goods are loaded “on board” the shipping vessel.

FOB gives the buyer a high degree of control over the freight shipping process. Since the buyer is choosing their own forwarder, they benefit from greater flexibility with regards to cost, terms, and shipping planning.

EXW (ExWorks)

The ExWorks incoterm means that responsibility transfers to the buyer at the supplier’s warehouse and not on board the vessel.

This means the buyer pays for and is responsible for goods’ transport every step of the way, from door to door. All the supplier needs to do is prepare the goods for pick up.

This incoterm gives the buyer full control over freight costs, but also means they are responsible for everything that happens in the origin country– which is frequently not their country of residence. More experienced shippers may benefit from using this incoterm.

FCA (Free Carrier)

When using FCA, the buyer assumes responsibility and costs once the goods are loaded onto a mode of transportation or delivered to a specific location agreed upon by the buyer and seller – typically this is a port.

This incoterm is used for all shipping modes.

With FCA, the supplier is responsible for packaging and transport at the origin. This means the supplier has more responsibility than they do with ExWorks, but the buyer still assumes costs and responsibilities earlier than they do when using FOB.

Main Differences Specific to a Country

The above advice covers most countries in most circumstances. But there are some factors to keep in mind when choosing an incoterm with your supplier:

Customs procedures are much more relaxed at porous borders, like within the EU
Different countries require different produres and paperwork for shipments: the US requires a Customs Bond, importing into the UK requires a Deferment Account, and exporting from India includes a withholding tax.

When to Challenge Advice
Some freight forwarders prefer only using a favored set of incoterms because they “seem to work.” Therefore don’t be surprised if some forwarders push back on your selection of incoterm, despite it being the most appropriate incoterm for your shipment.

What Shipping Incoterms Don’t Cover

Incoterms do not cover property rights, possible force majeure situations and breach of contract. Include of these within the contract of sale. Similarly, all incoterms except the C terms do not assign responsibility for arranging insurance. Cargo insurance is, therefore, a separate cost for buyers.

Define Named Place in the Sales Contract
When the incoterm is written in the sales contract, the named place should immediately follow the three letter incoterm abbreviation, e.g. “FCA Shenzen Yantian CFS.” Be precise when defining the location, especially with larger cities that may have several terminals, and with larger terminals that may have several drop-off points. You can use this global port finder to find specific port codes.

How Letters of Credit Limit Choice of Incoterm
If the sale is being completed with a letter of credit or documentary credit, the chain that releases funds begins with the seller providing several documents to the bank, including the bill of lading/air waybill. Letters of credit are used where there is limited trust between the seller and the buyer. That rules out EXW, because the supplier will be paid before pickup. F terms require trust because if the buyer cancels the international transit, the supplier won’t have a bill of lading to present to the bank. D terms require trust because the seller is bearing all of the transport costs. That leaves the four C terms as the best options to use with a letter of credit.

Individual Incoterms

EXW | FCA | FAS | FOB | CPT | CIP | CFR | CIF | DPU | DAP | DDP

The post Incoterms 2026: Meaning, Chart & List Of Incoterms appeared first on Freightos.

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The New Economics of Logistics Visibility

Published

17 heures ago

5 octobre 2026

Knowing that a shipment will arrive six hours late is information. Knowing it early enough to reschedule labor, protect a customer commitment, avoid detention, or change an inventory decision is economic value.

That distinction is becoming central to the logistics visibility market. The earlier argument that exceptions are becoming the real unit of work explains why visibility economics depend less on event volume than on whether the organization can convert important events into timely resolution.

The first era of visibility was largely about answering a basic question: Where is my shipment? The next era is about a harder question: What should I do because its state has changed?

Visibility Is Not the Outcome

Location and status data can be valuable, but they are intermediate products. A business does not earn a return because a dot moved across a map more accurately. The return appears when information changes an operational decision. A useful way to think about visibility is as a chain: signal -> interpretation -> decision -> intervention -> economic outcome. If any link is missing, much of the potential value disappears.

A Signal Has to Arrive Inside the Decision Window

Timing matters.

A delay discovered after the customer has already missed production is history. The same delay identified early enough to expedite an alternate shipment may be actionable. An ETA update received after warehouse labor has reported for a shift may have less value than the same update received while the schedule can still be changed.

This means visibility quality is not only about accuracy. It is about whether the signal arrives with enough lead time to support an intervention.

Not Every Exception Deserves Attention

As visibility improves, organizations often discover a new problem: too many exceptions. A network with thousands of shipments will always contain delays, deviations, missed scans, changing ETAs, and incomplete data. If every deviation creates an alert, planners become the bottleneck. The more important capability is prioritization.

Which late shipment threatens a high-value order? Which delay creates a stockout? Which container risks demurrage? Which arrival change will disrupt a dock schedule? Which event is likely to self-correct without intervention?

Visibility becomes intelligence when the system can distinguish operational consequence from mere deviation.

ETA Is a Decision Input

Estimated time of arrival is a good example of how the economics are changing. ETA was once primarily a customer-service or tracking metric. Increasingly it can influence warehouse scheduling, yard planning, labor, inventory, customer promises, and downstream transportation. That makes ETA a shared operating variable.

The value increases when the prediction is connected to the systems that can respond. A changing ETA that remains trapped in a visibility dashboard creates less value than one that can trigger a workflow or decision elsewhere.

Dwell, Detention, and Demurrage Make the Economics Visible

Some visibility use cases have direct financial consequences. Better awareness of arrival, dwell, free-time windows, and container status can help organizations manage detention and demurrage exposure. Yard visibility can reduce unnecessary trailer search and moves. Earlier exception detection can protect delivery appointments and reduce costly service recovery. These cases make an important point: visibility value is often realized outside the visibility platform itself.

More Visibility Can Increase Work

This is the uncomfortable side of digital transparency. If a company exposes ten times as many events but does not improve prioritization or workflow, it may create ten times as many things for people to inspect. The result can be an expensive monitoring layer sitting on top of the same manual decision process.

That is why visibility and autonomous exception management are converging. The system must increasingly help decide which events require action, assemble context, recommend a response, and automate routine resolution where appropriate.

Measure Intervention, Not Just Coverage

Visibility programs are often measured by tracking coverage, data completeness, ETA accuracy, or number of connected carriers. Those are necessary operating metrics, but they do not fully describe business value.

Organizations should also ask: How many material exceptions were identified early enough to act? How quickly were they resolved? How often did intervention protect service or avoid cost? How many alerts required no useful action? How much planner time was consumed per exception?

Those measures connect visibility to economics.

The Market Is Moving Toward Action

This shift has strategic implications for technology providers. Pure visibility is becoming less differentiated as location and event data become more widely available. The higher-value layer is interpretation and action: understanding what an event means to a specific operation and helping execute the appropriate response.

That pushes visibility platforms toward orchestration, workflow, decision intelligence, and AI. It also pushes TMS, WMS, and other execution systems toward richer external event awareness.

The Bottleneck Moves

For years, logistics organizations complained that they could not make better decisions because they could not see what was happening. Increasingly, they can see more.

The bottleneck is moving.

When a network can identify exceptions continuously, the constraint becomes the speed and quality with which the organization can interpret and resolve them. That is precisely the environment in which AI agents become interesting—not because logistics needs another conversational interface, but because it needs more capacity to do operational work.

Related Logistics Viewpoints research

The New Architecture of Logistics
Systems Engineering in Logistics
2026 Autonomous Exception Management Market Map
The Economics of Decision Latency
Previous in this series: Transportation Is Becoming Computational

Request The New Architecture of Logistics Client Edition

If your organization is assessing connected execution, orchestration, AI, observability, decision velocity, or selective autonomy, I would be glad to provide the complete client edition and discuss the implications for your logistics operating model and technology architecture.

Request the client edition

The post The New Economics of Logistics Visibility appeared first on Logistics Viewpoints.

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o9 Solutions Uses a Knowledge Graph to Connect Supply Chain Decisions

Published

17 heures ago

5 octobre 2026

Supply chain decision-making is difficult partly because the relevant information is distributed across products, locations, suppliers, orders, capacities, policies, and external events. A system may have access to all of those records and still struggle to understand the relationships among them quickly enough to support a consequential decision.

o9 Solutions addresses that problem through its Digital Brain architecture, including an enterprise knowledge graph and in-memory modeling designed to connect demand, supply, inventory, planning, and operating context. That semantic layer is important because it gives analytics and AI a structured representation of how supply chain entities relate to one another rather than treating the environment as a collection of independent tables and documents.

The company combines this architecture with integrated planning, optimization, scenario modeling, machine learning, and human oversight. The strategic direction is toward a continuous decision environment where changes can be interpreted quickly, alternatives can be modeled, and recommendations can be traced back to the assumptions, events, and constraints that produced them.

As with any broad planning and intelligence platform, the value depends on implementation quality. Knowledge models need strong data governance, entity resolution, process ownership, and clear decision rights. A sophisticated model of the supply chain is useful only if the organization can keep it current and use it consistently in real operating workflows.

o9 Solutions appears in the Logistics Viewpoints Supply Chain Decision Intelligence MarketMap and Autonomous Exception Management MarketMap. The two MarketMaps highlight the relationship between integrated decision intelligence and the faster exception-response capabilities now developing around it.

The post o9 Solutions Uses a Knowledge Graph to Connect Supply Chain Decisions appeared first on Logistics Viewpoints.

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AI Will Not Transform the Supply Chain Until the Architecture Around It Catches Up

Published

20 heures ago

5 octobre 2026

Executive thesis. The model is becoming the least durable layer of the AI stack. Sustainable advantage will come from the operating architecture around AI: authoritative context, governed tools, permissions, observability, and connection to enterprise workflows.

The model is only one component

Supply chain AI discussions often begin with model capability: prediction accuracy, reasoning quality, computer vision performance, or the fluency of a generative system. Those capabilities matter, but operational value depends on everything around the model. The system still needs authoritative context, enterprise tools, permissions, workflow, observability, and a reliable path from recommendation to action.

Different AI patterns solve different problems

Prediction, optimization, generative AI, vision, and agents should not be treated as interchangeable technologies. Forecasting demand, selecting a route, extracting information from a document, interpreting an image, and executing a multi-step workflow require different evidence, control, and performance measures. A mature architecture starts with the decision or task and chooses the AI pattern that fits it.

Context is the operating fuel

An AI system can produce a plausible answer while using stale or incomplete operational context. In logistics, that can be dangerous because the truth may reside across orders, inventory, rates, carrier status, warehouse state, supplier records, and policy documents. Retrieval, master data, identity resolution, and system access therefore become part of the AI architecture, not secondary data-engineering concerns.

Tool access turns intelligence into consequence

The moment an AI system can create a shipment, change an order, contact a carrier, release inventory, or approve an exception, governance becomes an operational requirement. Tool permissions, financial limits, approval gates, idempotency, retries, and rollback are the mechanisms that separate an interesting demonstration from a dependable production workflow.

Measure workflow performance

A fluent response is not the right success metric for operational AI. Supply chain leaders should measure decision latency, manual context gathering, exception closure, override behavior, error recovery, tool failure, and the business outcome being improved. That measurement discipline also creates a rational basis for expanding autonomy as evidence accumulates.

The Logistics Viewpoints AI in Logistics: Use Cases, Architecture, and Implementation Guide separates the major AI patterns and connects them to data, tools, governance, workflow, observability, and ROI—the architecture required to move from model capability to operating value.

Executive implication

AI strategy should separate model selection from control architecture and measure value through workflow performance, decision quality, and operational outcomes.

Go deeper: provides the durable buyer, architecture, and implementation reference for this topic. AI & Advanced Analytics connects this analysis to the broader Logistics Viewpoints research architecture.