Incoterms Selector & Guide
Choosing the right Incoterm can change who arranges freight, who pays for transportation, where risk transfers, and who handles customs responsibilities. Use this Incoterms selector to compare common Incoterms 2020 options before requesting quotes from freight forwarders, customs brokers, suppliers, or logistics providers.
Answer four questions about your shipment and the tool will suggest a practical starting point, explain buyer vs seller
responsibilities, and show where responsibility typically shifts during the movement of goods. This is not a substitute
for professional advice, but it can help you have a clearer conversation before you quote, book, or negotiate an
international shipment.
Answer four questions to see a recommended Incoterm and a visual responsibility breakdown.
Incoterms 2020 Selector
Answer four questions about your shipment to get a recommended Incoterm, a plain-English explanation, and a buyer vs seller responsibility breakdown.
| Responsibility | Who handles it | Notes |
|---|
What are Incoterms?
Incoterms (International Commercial Terms) are a set of standardized trade terms published by the International Chamber of Commerce (ICC). They define who is responsible for arranging transportation, paying freight costs, handling customs clearance, purchasing cargo insurance, and bearing the risk of loss or damage at each stage of a shipment. The current edition, Incoterms 2020, includes 11 terms covering ocean, air, ground, and multimodal shipments. Incoterms do not address payment terms, ownership transfer, or the full scope of a sales contract — they cover logistics and risk responsibilities only.
Which Incoterm is best for importers?
There is no single best Incoterm for all importers, but FCA (Free Carrier) is widely considered a practical and flexible option for most professional import situations. FCA allows the importer to choose their own freight forwarder and control the main carriage costs and routing. DAP (Delivered at Place) works well when the importer wants the supplier to handle more of the logistics up to a named destination. If the importer wants complete door-to-door delivery with all duties prepaid, DDP (Delivered Duty Paid) places the most responsibility on the seller — but the seller must be able to legally handle import clearance and duties in the destination country. For ocean shipments, FOB is common but has limitations with containerized cargo; FCA is often the better alternative for modern containerized trade.
What is the difference between FOB and CIF?
Under FOB (Free On Board), the seller delivers the goods on board the vessel at the named port of shipment. Risk transfers to the buyer at that point, and the buyer is responsible for the main ocean freight and cargo insurance from the named port onward. Under CIF (Cost, Insurance and Freight), the seller pays for the ocean freight and is required to arrange minimum cargo insurance, but risk still transfers to the buyer when goods are placed on board the vessel at origin — even though the seller paid for the freight and insurance. Both FOB and CIF are sea and inland waterway terms only. For containerized shipments, many freight professionals prefer FCA (buyer arranges main carriage) or CPT/CIP (seller arranges main carriage) because risk transfer under those terms occurs at a more practical, earlier point in the journey — usually when goods are handed to a carrier or freight station.
What is the difference between DAP and DDP?
Under DAP (Delivered at Place), the seller delivers goods to a named destination, bearing all costs and risks up to that point — but the buyer is responsible for import customs clearance, duties, and taxes on arrival. Under DDP (Delivered Duty Paid), the seller takes on all responsibilities including import customs clearance and the payment of all applicable duties and taxes. DDP is the highest obligation for a seller. Sellers using DDP must be able to act as importer of record or appoint a licensed customs broker in the destination country — not all sellers can legally or operationally do this. Buyers who want maximum simplicity often prefer DDP, but they should verify that their supplier has the ability to handle it properly.
Do Incoterms determine who owns the goods?
No. Incoterms do not determine ownership or title transfer. They only define when and where the risk of loss or damage transfers between seller and buyer, who is responsible for arranging and paying for transportation and insurance, and who handles customs clearance. Ownership and title are governed by the underlying sales contract, which is a separate document. Many buyers and sellers confuse risk transfer with title transfer — they are different concepts, and Incoterms address only the former.
Should I ask a customs broker or freight forwarder before choosing an Incoterm?
Yes, for any commercial shipment. The right Incoterm depends on factors this tool cannot fully evaluate — your product type, country of origin, destination country regulations, carrier requirements, insurance needs, and the specific capabilities of your supplier. A licensed customs broker can advise on import compliance and duties. A freight forwarder can advise on practical logistics and carrier requirements. Both can help you identify terms that protect your interests and match your operational setup. Use this selector to start the conversation and build familiarity with the terms — then confirm your choice with a professional before signing a purchase order or sales contract.
Need help beyond the Incoterms selector?
An Incoterm can clarify who handles freight, customs, insurance, delivery, and risk transfer — but it does not replace the right logistics partner. If you are importing, exporting, or comparing international shipping options, use National Freight Hub to find customs brokers, freight forwarders, warehousing providers, and logistics companies that can help review the details before your shipment moves.