Incoterms Chooser
Answer four questions to find the Incoterms® 2020 rule that matches how you actually want to split transport, risk, insurance and customs with your buyer or seller. Includes notes on Northern Ireland trade and CBAM.
How will the goods travel?
Who books and pays for the main journey?
Where does the seller hand the goods over?
Who carries the risk while the goods are travelling?
Must the seller insure the goods for the buyer?
How far does the seller go at the destination?
All 11 rules at a glance
S = seller, B = buyer. The column for your answer is highlighted. Incoterms cover delivery, risk, costs and customs tasks. They don't cover payment terms, when ownership passes, or what happens if the contract is broken.
Northern Ireland, customs and carbon notes
GB to NI isn't an export
Goods moving between GB and NI stay within the UK, but under the Windsor Framework moves into NI can still need declarations and green or red lane routing. Incoterms remain useful for setting out who does that paperwork and who pays.
NI and the EU
NI follows EU rules for goods, so trade between NI and the Republic of Ireland or the rest of the EU has no customs declarations. Incoterms still decide who pays for transport and who carries the risk.
DDP makes the seller the importer
Under DDP the seller clears import, so the seller usually becomes the importer of record. That can bring duties, import VAT and CBAM obligations for steel, aluminium, cement, fertiliser and hydrogen. UK CBAM starts on 1 January 2027, and EU CBAM is already in its definitive phase.
EXW is rarely the easy option
Under EXW the buyer must export the goods from your country, which a foreign buyer often can't do properly. FCA at your premises is usually the cleaner choice: you load and export-clear, and the buyer handles the rest.
FOB, CFR and CIF are for ships, not containers
With containers, the seller loses control at the terminal, well before the goods go "on board". The International Chamber of Commerce (ICC) recommends FCA, CPT and CIP instead.
Scope 3: who pays for the freight?
The Incoterm decides who pays the carrier. If you pay, the freight is your Scope 3 category 4, even for deliveries to customers. If your customer pays, it's category 9. See the Scopes Map.