Incoterms 2020
The ICC's 11 official rules that define cost, risk, and clearance responsibilities between seller and buyer in international trade. Select one to see details and common pitfalls in LATAM.
Select an Incoterm
Maritime / inland waterway only Any mode of transport
Incoterm 2020
FOB
Free On Board
Maritime only
Seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Maritime only.
Cost & risk allocation
S SellerB Buyer
| Journey phase | Cost | Risk |
|---|---|---|
| Export packing | S | S |
| Origin loading | S | S |
| Inland origin | S | S |
| Export customs | S | S |
| Main freight | B | B |
| Insurance | B | B |
| Import customs | B | B |
| Inland destination | B | B |
| Destination unloading | B | B |
Common pitfalls in LATAM
What we see often with FOB to or from LATAM
- 1FOB only applies to maritime bulk or break-bulk cargo. For containers, the ICC recommends FCA, not FOB — though the industry still uses FOB by tradition.
- 2Origin LATAM: seller must hire the customs agent and pay terminal costs — verify these are included in their FOB quote.
- 3Risk transfers when loaded on board, not when arriving at the port. If a crane drops the cargo mid-lift, liability depends on the exact moment.
Quick comparison
Overview of the 11 Incoterms across 9 journey phases. S = seller, B = buyer.
| Incoterm | Export packing | Origin loading | Inland origin | Export customs | Main freight | Insurance | Import customs | Inland destination | Destination unloading | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | Cost | Risk | |
EXW | S | S | B | B | B | B | B | B | B | B | B | B | B | B | B | B | B | B |
FCA | S | S | S | S | S | S | S | S | B | B | B | B | B | B | B | B | B | B |
FAS | S | S | S | S | S | S | S | S | B | B | B | B | B | B | B | B | B | B |
FOB | S | S | S | S | S | S | S | S | B | B | B | B | B | B | B | B | B | B |
CFR | S | S | S | S | S | S | S | S | S | B | B | B | B | B | B | B | B | B |
CIF | S | S | S | S | S | S | S | S | S | B | S | S | B | B | B | B | B | B |
CPT | S | S | S | S | S | S | S | S | S | B | B | B | B | B | S | B | B | B |
CIP | S | S | S | S | S | S | S | S | S | B | S | S | B | B | S | B | B | B |
DAP | S | S | S | S | S | S | S | S | S | S | B | B | B | B | S | S | B | B |
DPU | S | S | S | S | S | S | S | S | S | S | B | B | B | B | S | S | S | S |
DDP | S | S | S | S | S | S | S | S | S | S | B | B | S | S | S | S | B | B |
Click any row to view the full detail of that Incoterm above.