Incoterms in road freight: EXW, FCA, DAP, DDP

Incoterms are rules published by the International Chamber of Commerce (ICC) that set where costs and risk pass between seller and buyer. The current edition is Incoterms 2020. The rule is written into the sales contract; it does not bind the carrier directly, but it decides who books the truck, who pays the freight and who handles customs.

EXW: Ex Works

The seller makes the goods available at its own premises. Loading, export clearance, transport and import clearance are the buyer's job. It is the lightest rule for the seller. In practice the seller often helps with loading, but the rule does not make it responsible, so damage during loading can become a dispute.

FCA: Free Carrier

The seller clears export and hands the goods to the carrier named by the buyer. If delivery is at the seller's premises, loading is also on the seller. On the road FCA is usually recommended over EXW: having the seller file the export declaration is practical and in some countries required.

DAP: Delivered at Place

The seller delivers the goods on the arriving vehicle, ready for unloading at the destination. The seller books and pays the transport and carries the risk until arrival. Import clearance and duties are on the buyer. It is one of the most common rules for road sales within Europe.

DDP: Delivered Duty Paid

Like DAP, but the seller also clears import and pays the duties. It is the heaviest rule for the seller and causes problems if the seller cannot act as importer in the buyer's country.

What changes for the carrier?

• Who books the truck: under EXW and FCA the buyer usually arranges transport; under DAP and DDP the seller.
• Customs documents: the export declaration comes from the seller under FCA, DAP and DDP; under EXW it is the buyer's task. The load should say who handles it so the truck does not wait at the border.
• Waiting: the order should state who pays waiting charges caused by customs delays.

Short definitions of the terms are in the Freight Glossary.