• Incoterms are “the daily language of trade…”
  • Reduce exposure to problems…
  • At ICAT Logistics DTW, our experienced team is comfortably fluent in Incoterms…


When shipping goods around the world, the last thing you can afford is for your shipping label to be misunderstood. That can result in lost shipments for your customers, lost sleep for you, and lost revenue for your company.

That’s why it’s essential to use Incoterms. A widely recognized system of three-letter delivery designations, Incoterms cut through the clutter and confusion resulting from language differences to create a common language that everyone can understand.

Short for “International Commercial Terms,” Incoterms define the responsibilities of buyers and sellers in global commercial shipping to standardize a variety of trade practices. In doing so, the use of Incoterms reduces exposure to problems that can occur when parties from different nations interpret delivery terms differently.

As the International Chamber of Commerce (ICC) says it, Incoterms are “the daily language of trade.”


At ICAT Logistics Detroit, our experienced team is comfortably fluent in Incoterms. Day-in and day-out, our professionals skillfully manage Incoterms as part of a shipping and logistics management to guide the worldwide flow of customers’ goods while minimizing risks and missteps.

Used properly, the current set of Incoterms, which were revised in 2020, clarifies responsibilities and enhances accountability among parties involved in the global sale and purchase of goods, including:

  • Responsibility for shipping costs, insurance, transport documents, clearing customs, packaging, and goods inspection
  • Responsibility for delivery, routing, and information-sharing
  • Responsibility for assigning when contract trade partners assume responsibility for risk

While providing greater understanding and precision, Incoterms are not a contract of sale. Rather, they accompany international contractual agreements and are sufficiently versatile to apply to an array of trading activities, from the bulk cargo of raw materials to electronic equipment and fresh flowers.

The ICC emphasizes that Incoterms do not cover everything involved in a trade deal. Among activities not covered are:

  • Whether there is a contract of sale;
  • Specifications of the good sold;
  • Remedies available for breach of the contract of sale;
  • Consequences of delay and other breaches in the performance of contractual obligations


For a comprehensive review of Incoterms 2020, visit the ICC website at Eleven Incoterms affirmed by the ICC in 2020 are:

  • EXW – Ex Works:
    • A seller gives a buyer access to goods at the seller’s premises or a designated location. With that action, the buyer accepts responsibility for most shipping risks and costs.
  • FCA – Free Carrier
    • With FCA, the seller is responsible for delivering and loading goods to a location chosen by the buyer. After the goods are loaded, the buyer is responsible for any property damage.
  • FAS – Free Alongside Ship
    • In this instance, a seller accepts the risks and cost of transport, including import duties. When goods arrive to be unloaded, the risk is assumed by the buyer.
  • FOB – Free On Board
    • A seller delivers goods on board a vessel chosen by the buyer. A seller bears responsibility for cost and risk until goods are loaded on board a designated vessel.
  • CFR – Cost and Freight
    • A seller delivers goods to a chosen port, with the risk of transferring to the buyer when goods are loaded onboard the ship.
  • CIF – Cost, Insurance, and Freight
    • A seller delivers and pays for costs, freight and insurance to a chosen designation and delivers when goods are on board a vessel chosen by the buyer.
  • CPT – Carriage Paid To
    • A seller bears the transportation cost to a buyer’s location, clears the goods for export, and delivers to a location chosen by the buyer.
  • CIP – Carriage and Insurance Paid To
    • Similar to CPT but requires a seller to insure the goods for transit. Changes to Incoterms in 2020 required the seller to buy a higher level of insurance.
  • DAP – Delivered at Place
    • Goods can be delivered to a dock or terminal, but also to a location such as a factory or a warehouse.
  • DPU – Delivered at Place Unloaded (Formerly DAT)
    • Often utilized when consolidated containers are intended for multiple consignees. A seller covers transportation costs and assumes all risk until arrival at a destination, usually a terminal or port.
  • DDP – Delivered Duty Paid
    • A seller delivers goods by placing them at the buyer’s disposal, cleared for import and duties paid, and ready to unload at a chosen location.

Putting Incoterms to their most effective use–to get the “best fit” to assure the greatest success–requires experience and an understanding of a customer’s needs, resources, and priorities.


For guidance and support in using Incoterms, you can rely on the proven performance of the ICAT Logistics Detroit team. They stand ready to explain and apply Incoterms to reduce risk, improve communication and assure accountability.

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