Incoterms 2020 Explained: Delivery Terms for Ukraine–EU Freight

What Incoterms are — and what they actually govern

Incoterms (International Commercial Terms) are a set of 11 standard delivery terms published by the International Chamber of Commerce (ICC). Each rule is a three-letter code — FCA, DAP, DDP and so on — that packages a ready-made allocation of duties between seller and buyer: who books and pays for carriage, who handles export and import clearance, and at what exact point the risk of loss or damage to the goods passes from one party to the other.

The current edition is Incoterms 2020, in force since 1 January 2020. Earlier editions have not been withdrawn — the parties are free to refer to any of them — which is why a contract should always state the rule, the named place and the year: for example, “FCA Lutsk, Incoterms 2020”.

It is just as important to understand what Incoterms do not govern: the transfer of title to the goods, the price and payment terms, liability for late delivery, the governing law and arbitration. All of that stays in the body of the contract. Incoterms are not a substitute for the contract of sale but its “vocabulary”: three letters save a page of drafting and protect the parties from reading the same words differently in different countries.

What changed in Incoterms 2020 compared with 2010

If you have been working under the 2010 edition, the substance is almost unchanged — but there are five practical differences worth knowing:

• DAT was renamed DPU (Delivered at Place Unloaded). The substance is the same — delivery with unloading — but the named place can now be any point, not just a terminal.
• The insurance level under CIP was raised. The seller must now provide insurance with the widest cover, Institute Cargo Clauses (A) — “all risks” — unless the parties agree on a lower level in the contract. The maritime CIF keeps the minimum cover — Clauses (C).
• FCA gained an on-board bill of lading option: the parties may agree that the buyer will instruct its carrier to issue the seller a bill of lading with an “on board” notation — removing the biggest headache for exporters selling under letters of credit.
• Carriage using the seller’s or buyer’s own transport is now allowed. The 2010 edition assumed the carrier was a third party; the 2020 rules expressly provide that the seller or the buyer may move the goods in their own vehicles.
• Costs and security requirements are spelled out more transparently — every rule now carries its own list of who pays for what, including security screening and related certificates.

All 11 Incoterms 2020 rules at a glance

The rules are conventionally split into four groups — from the seller’s minimum obligations to the maximum: E (departure), F (main carriage not paid by the seller), C (main carriage paid by the seller, but risk already with the buyer), D (delivery to the place of destination).

The first seven rules work for any mode of transport, road haulage included — and these are the ones that matter for Ukraine–EU cargo. The last four (FAS, FOB, CFR, CIF) were written exclusively for sea and inland-waterway carriage. Let’s take a closer look at the rules that appear most often in contracts involving road freight.

EXW — “collect it from our warehouse”

Ex Works places the fewest obligations on the seller: it merely makes the goods available at its own premises, while everything else — loading, export clearance, carriage, import — falls to the buyer. On paper it looks simple; in practice there is a trap for exports from Ukraine: the export customs declaration must be filed by a Ukrainian resident, so the clearance ends up being handled by the seller or its customs broker anyway — contrary to the letter of the rule. For that reason FCA is usually recommended instead of EXW for exports: it honestly reflects what actually happens and removes any argument over who is responsible for customs clearance. EXW makes sense mainly when the buyer has its own representative in the seller’s country.

FCA — the workhorse of road freight

Free Carrier is the most widely used term for exports from Ukraine by road. The seller completes export clearance and hands the goods over, at the named place, to the carrier appointed by the buyer. Risk passes at the moment of handover. The named place comes in two flavours: if it is the seller’s premises, the seller must load the truck; if it is any other point (a terminal or a consolidation warehouse), the seller delivers the goods there and hands them over without unloading. For the buyer, FCA is attractive because the freight stays under its control: the buyer chooses the carrier, the route and the insurance — and since the carrier’s liability is capped under the CMR Convention, buyers under FCA usually take out voluntary cargo insurance as well.

DAP — door delivery, customs not included

Delivered at Place is the mirror image: now it is the seller who arranges and pays for delivery to the named place of destination, while the buyer takes care of unloading and import clearance, paying the duties and VAT. This is the typical import scenario into Ukraine: an EU supplier writes “DAP Lutsk” in the contract, delivers the goods to the buyer’s warehouse, and the Ukrainian buyer clears them through its own customs broker. The key point is to name the place of destination as precisely as possible: “DAP Ukraine” breeds disputes, while “DAP, Lutsk, street and number” does not. One more practical note: truck demurrage caused by unfinished import clearance is also the buyer’s problem, so agree the arrival date with your broker in advance.

DPU — the only rule with unloading

Delivered at Place Unloaded differs from DAP by a single action: the seller must also unload the goods, and risk passes only once unloading is complete. It is the only Incoterms rule that puts unloading on the seller. It is chosen when the seller genuinely controls the process at destination — say, delivery to a terminal or a warehouse operated by its own contractor. Without that certainty, it is safer to stay with DAP and leave unloading to the buyer.

DDP — the seller’s maximum

Delivered Duty Paid is the opposite of EXW: the seller delivers goods that are already customs-cleared, having paid the import duties and taxes. For the buyer it is “all inclusive”, but in practice a “pure” DDP into Ukraine is hard to pull off: import clearance must be performed by a declarant who is a Ukrainian resident, and hiring a customs broker does not remove that requirement — the broker merely acts on the declarant’s behalf. In effect a non-resident seller needs a Ukrainian party of its own (a subsidiary or a registered representative office) — and then there is still the question of recovering the import VAT. That is why real-world contracts often replace DDP with DAP, with the buyer taking on the clearance through its own broker: the result is the same door-to-door delivery, minus the legal tangle.

CPT and CIP — where cost and risk part ways

The C group hides the nuance people stumble over most often: the seller pays for carriage all the way to the destination, but risk passes to the buyer much earlier — the moment the goods are handed to the first carrier. In other words, the truck rolls “at the seller’s expense” but “at the buyer’s risk”. A classic example: the seller pays for a CPT haul from Kyiv to Berlin and the cargo is damaged en route — the carriage was paid by the seller, but the risk passed back in Kyiv at loading, so the loss and the claim against the carrier belong to the buyer, even though the carriage contract was concluded by the seller. CIP differs from CPT in one respect only: the seller must additionally insure the cargo in the buyer’s favour — and, since the 2020 edition, the default is “all risks” cover under ICC (A) unless the parties agree otherwise.

The maritime four — FAS, FOB, CFR, CIF — and why they don’t fit trucks

The last four rules apply only to sea and inland-waterway transport: their risk-transfer point is tied to the vessel itself — alongside it under FAS, or once the goods are on board under FOB, CFR and CIF. A common mistake is writing “FOB Gdansk” for a container that travels to the port by truck: under FOB the risk stays with the seller right up to loading on board, even though the container left the seller’s control back at the terminal. For containerised shipments with a road leg, the ICC itself expressly recommends FCA, CPT or CIP instead of FOB/CFR/CIF.

Incoterms and the paperwork: invoice, CMR, declaration

The chosen term is set out in the contract and on the invoice in the format “rule + exact place + edition”: “DAP Warsaw, [street address], Incoterms 2020”. The more precise the named place, the less room there is to argue about where the seller’s obligations end. Whatever the term, every international road shipment travels under a CMR consignment note — it serves as evidence of the contract of carriage between the shipper and the carrier, not between the seller and the buyer, so it is issued in every case. The standard customs document pack is an invoice, a packing list, an export declaration and, where needed, a T1 transit declaration. Who prepares each of those documents is precisely what the chosen Incoterms rule determines.

Frequently asked questions about Incoterms 2020