Quoting EXW to a foreign buyer
Your buyer usually can't file U.S. export declarations — they have no U.S. presence. The obligation returns to you, but now you're doing it without control of the shipment or a contract that pays you for it. Quote FCA.
Guide · Seller's side
Incoterms for exporters.
All eleven Incoterms 2020 rules, read from the seller's side: what each one costs you, where your risk ends, and which to quote when. No diagram required.
Short answer
Incoterms are eleven standard rules published by the International Chamber of Commerce that define who pays for what, and where risk passes, in an international sale. For most exporters the right term is FCA on air, truck and multimodal shipments, and FOB on ocean. Both mean you clear the goods for export and hand them over at origin, so your risk ends early while the buyer controls the main carriage.
Avoid EXW — a foreign buyer usually cannot file U.S. export declarations, so the obligation returns to you without a contract that pays for it.
Incoterms 2020 · Reviewed 7 August 2026 · Imports Exports Logistics, Inc.
The rules
What each term costs you as the seller.
The single most expensive mistake in exporting is agreeing to a term you haven't priced. Risk and cost do not always transfer at the same point — under CFR, CIF, CPT and CIP they deliberately don't.
| Term | Name | You pay | Your risk ends | Export clearance |
|---|---|---|---|---|
| EXW | Ex WorksAny mode | Nothing past your loading dock | At your premises, when goods are made available | Buyer |
| Lowest headline price you can quote. But the buyer often can't file U.S. export declarations, so the obligation lands back on you anyway — and you lose all visibility. Quote FCA instead nine times out of ten. | ||||
| FCA | Free CarrierAny mode | Export clearance, and delivery to the named place | On loading at your premises, or when placed at the buyer's carrier | You |
| The term EXW should usually be. You clear export — which you're equipped to do — and risk ends early. Under Incoterms 2020 you can also require an on-board bill of lading, which matters if your buyer pays by letter of credit. | ||||
| FAS | Free Alongside ShipSea only | Inland haulage and export clearance, to the quay | Alongside the vessel at the named port | You |
| Bulk and breakbulk cargo. Rarely right for containers, because your risk ends before the container is loaded. | ||||
| FOB | Free On BoardSea only | Everything to the vessel, including export clearance | When goods are on board the vessel | You |
| The most common ocean term and usually the fairest split. Quote this unless you have a reason not to. | ||||
| CFR | Cost and FreightSea only | Ocean freight to the destination port | On board at origin — before you've paid the freight | You |
| When you want to control the carrier and routing. Note the gap: you pay to destination but your risk ended at origin. Insure it anyway. | ||||
| CIF | Cost, Insurance & FreightSea only | Ocean freight plus insurance to the destination port | On board at origin | You |
| Letters of credit often demand it. The catch: minimum cover is Institute Cargo Clauses (C) — thin. Buy better cover than the term requires. | ||||
| CPT | Carriage Paid ToAny mode | Carriage to the named destination | When handed to the first carrier | You |
| The multimodal equivalent of CFR. Watch the risk transfer point — it's much earlier than most sellers assume. | ||||
| CIP | Carriage and Insurance Paid ToAny mode | Carriage plus insurance to the named destination | When handed to the first carrier | You |
| Since Incoterms 2020, CIP requires all-risks cover (ICC A), not the minimum CIF allows. Better protection for your buyer, higher cost to you — price it in. | ||||
| DAP | Delivered At PlaceAny mode | Everything to the named destination, not unloaded | On arrival at the destination, ready for unloading | You |
| A strong offer that stops short of foreign duty exposure. Often the smart alternative to DDP. | ||||
| DPU | Delivered at Place UnloadedAny mode | Everything to destination including unloading | After unloading at the named destination | You |
| Replaced DAT in Incoterms 2020. The only term where you're responsible for unloading — make sure you can actually do it at that site. | ||||
| DDP | Delivered Duty PaidAny mode | Everything, including foreign import duty and taxes | On arrival at the buyer's door | You (both ends) |
| The strongest offer you can make and the one most likely to cost more than you quoted. Never quote it without checking the destination duty rate and whether a foreign entity may act as importer of record there — in several countries it can't. | ||||
⚓ sea and inland waterway onlyAll others work for any mode, including air and truck
Three traps
Where exporters actually lose money.
01
02
Assuming cost and risk transfer together
Under CFR, CIF, CPT and CIP you pay the freight to destination but your risk ended at origin. If the cargo is damaged mid-ocean, it's the buyer's loss — and their claim. Many sellers discover this after the fact.
03
Quoting DDP without checking
Foreign duty rates vary enormously, and in several countries a non-resident entity cannot legally act as importer of record at all. Quote DAP instead and let your buyer clear it.
Changed in 2020
What's different from Incoterms 2010.
DAT became DPUDelivered at Place UnloadedRenamed & broadened
CIP insurance raised to ICC (A)All-risks cover, not minimumCosts the seller more
FCA on-board bill of lading optionFor letters of creditNew provision
Own-transport delivery recognisedFCA, DAP, DPU, DDPClarified
Incoterms 2010 remains valid if your contract specifies it. Always state which version — "FOB Miami Incoterms 2020", not just "FOB".
Common questions
Exporter questions, answered.
Which Incoterm should an exporter quote?
FCA for air, truck and multimodal shipments, and FOB for ocean. Both mean the seller clears the goods for export and hands them over at origin, so risk ends early while the buyer controls the main carriage. Avoid EXW, because a foreign buyer usually cannot file U.S. export declarations.
Do cost and risk transfer at the same point?
Not always. Under CFR, CIF, CPT and CIP the seller pays carriage to the destination but risk transfers at origin — either on board the vessel or at the first carrier. You pay for a journey during which the goods are already at your buyer's risk. Insure accordingly.
What changed in Incoterms 2020?
DAT was renamed DPU (Delivered at Place Unloaded). CIP now requires all-risks insurance under Institute Cargo Clauses A rather than minimum cover. FCA gained an option for an on-board bill of lading, which matters for letters of credit. And delivery using the seller's or buyer's own transport is explicitly recognised.
Is DDP a good term to quote?
It's the strongest offer you can make and the one most likely to cost more than you quoted. You pay foreign import duty and taxes, and in several countries a non-resident entity cannot legally act as importer of record at all. DAP is usually the safer alternative.
Which version should my contract cite?
Always state the version explicitly — "FOB Miami Incoterms 2020", not just "FOB". Incoterms 2010 remains valid if your contract specifies it, and the two differ on points that matter.
Not sure which term to quote?
Tell us the destination and what you're selling. We'll tell you which term protects you, what it costs, and what your buyer will accept.
General guidance, not legal advice. Your sales contract governs.