Also called: Incoterms 2020, International Commercial Terms
What the ICC rules allocate
Each rule is a three-letter code plus a named place. The widely used current edition is Incoterms 2020; the contract should say which edition applies. There are eleven rules: some can be used for any mode of transport, and four (FAS, FOB, CFR, CIF) are intended for sea and inland waterway only.
This page is an educational summary of how commodity RFQs use those rules. The official text is in the ICC Incoterms® 2020 publication, which is copyrighted and is not reproduced here. Incoterms® is a trademark of the ICC.
How to choose a rule and a named place
First pick the family that matches how the goods actually move. Sea bulk and bagged cargo often uses FOB, CFR or CIF. Goods handed to a carrier before they are on board, which is common with containers, usually belong with FCA, CPT or CIP rather than the sea-only set.
Then name the place. FOB needs a port of shipment. CFR and CIF need a port of destination. Freight, insurance and terminal charges can dwarf a small difference in unit price. A FOB load-port number and a CIF discharge-port number are not the same deal.
Risk versus freight
Who pays main freight is not the same as who bears transit risk. Under CFR and CIF the seller pays carriage to the named destination port, but risk still transfers when the goods are on board at the port of shipment. Reading “CIF” as “seller on risk until arrival” is a common error; the letters do not say that.
What Incoterms do not decide
Payment method, when title passes, force majeure, quality specification, inspection rights, or which documents a letter of credit will require, except where the chosen rule requires a transport document. Those points belong in the contract and, for quoting, in the RFQ. Do not assume DDP-style import clearance on a C-term.
FOB, CFR and CIF at a glance
Use this table only to compare the three sea terms. Each term has its own page for obligations, mistakes and RFQ wording. They are common on dry-bulk and bagged sea cargoes, not a default for containers.
| Rule | Named place | Main freight | Seller insurance duty | Typical risk transfer |
|---|---|---|---|---|
| FOB | Port of shipment | Buyer | None under the rule | On board at origin |
| CFR | Port of destination | Seller | None under the rule | On board at origin |
| CIF | Port of destination | Seller | Minimum cover required by the rule | On board at origin |
Naming mistakes that break comparability
FOB on a full container load when the seller cannot deliver on board. “CIF” with no port. US domestic “FOB warehouse” language treated as Incoterms 2020 FOB. Assuming CIF insurance is all-risks. Leaving the edition unnamed when one side still drafts in 2010 language.
TTC uses these terms in its RFQ and transaction process. Nothing on this page is a licence, a certification, a guarantee of clearance, or a substitute for the documents and clauses of a specific contract.