FCA, CPT, CIP, DAP and DPU can all be used for any mode of transport, yet they allocate transport control, cost, risk, insurance and unloading in very different ways. The most common mistake is to assume that the party paying freight also bears the risk to the same destination. Under CPT and CIP, the seller pays carriage to the named destination, but risk normally transfers when the goods are handed to the carrier. Under DAP and DPU, the seller retains risk to destination; the decisive difference is who unloads. This article compares the five rules through the same operational framework—delivery, risk transfer, carriage, insurance, customs clearance and unloading—so that businesses can select the right rule and draft the named place precisely.

Prepared by: TGIMEX · Updated: 21 July 2026 · Scope: B2B sales, single-mode and multimodal transport

QUICK FACTS

All five rules work with any mode

FCA, CPT, CIP, DAP and DPU belong to the group of rules for any mode or combination of modes.

FCA: buyer controls main carriage

The seller delivers at the named point to the carrier/person nominated by the buyer; risk transfers there.

CPT/CIP: seller pays freight, risk transfers early

The seller contracts carriage to destination, but risk transfers upon delivery to the carrier; CIP adds insurance.

DAP: destination, not unloaded

The seller bears cost and risk to destination and makes the goods available on the arriving vehicle, ready for the buyer to unload.

DPU: destination and unloaded

The seller bears cost, risk and unloading responsibility; DPU is the only rule requiring the seller to unload.

SCOPE OF APPLICATION

This article applies to domestic and international B2B sales using container shipping, air, road, rail or multimodal transport. It focuses on delivery, transfer of risk, carriage costs, insurance, customs clearance and unloading. Incoterms® do not by themselves determine title to the goods, payment terms, breach remedies, product quality, force majeure, governing law or dispute resolution; these must be addressed separately in the sales contract. This article does not replace the official ICC publication or transaction-specific advice.

KEY TERMS

Term	Meaning	Operational role
Delivery	The moment at which the seller completes delivery under the selected rule.	Triggers risk transfer and several cost consequences.
Named place	The location written after the three-letter rule: warehouse, terminal, port, airport or another point.	Precision reduces disputes over delivery and additional costs.
Place of delivery	The point at which delivery occurs and risk transfers.	Under CPT/CIP it may differ from the destination to which the seller pays freight.
Place of destination	The point to which the seller must arrange/pay carriage under CPT, CIP, DAP or DPU.	It is not automatically the risk-transfer point under CPT/CIP.
Carrier	The party contracted to carry the goods.	Handover to a carrier can trigger risk transfer under FCA/CPT/CIP.
Export / Import clearance	Export and import formalities, licences and related controls.	Under all five rules the seller handles export and the buyer handles import, where applicable.
Unloading	Removing the goods from the arriving means of transport.	Buyer under DAP; seller under DPU.

HOW THE RULES WORK

1. Incoterms® allocate delivery, costs and risk—not the entire contract

The rules address where delivery occurs, who arranges carriage, who bears risk, who clears customs and who unloads. They do not decide ownership or payment timing.

2. FCA gives control of main carriage to the buyer

The buyer nominates the carrier or recipient at the delivery point. At the seller’s premises, delivery occurs after loading onto the buyer-arranged vehicle. At another place, delivery occurs when the seller’s vehicle arrives, ready for unloading and at the disposal of the nominated carrier/person.

3. CPT and CIP separate risk transfer from the freight-paid destination

The seller contracts and pays carriage to destination, but delivery and risk transfer occur when the goods are handed to the carrier. With several carriers, unless the contract identifies another delivery point, risk transfers when the goods are handed to the first carrier at a point selected by the seller within the agreed place of delivery. CIP follows CPT but adds seller-procured insurance for the buyer’s interest.

4. DAP and DPU keep risk with the seller to destination

Under DAP, the goods are delivered on the arriving vehicle ready for unloading. Under DPU, delivery is completed only after the seller unloads the goods and places them at the buyer’s disposal.

5. The named point should be drafted precisely

A city or port name alone may be insufficient. State the address, terminal, gate, warehouse or precise point; for CPT/CIP, identify both the carrier-delivery point and the freight-paid destination when needed.

Key control: CPT/CIP separate risk transfer from the paid-to destination; DAP/DPU align delivery with destination but differ on unloading.

COMPARISON MATRIX

Rule	Delivery & risk transfer	Who arranges/pays main carriage?	Seller’s insurance obligation under the rule	Unloading at destination	Clearance	Typical fit
FCA	At seller’s premises after loading on the buyer-arranged vehicle; or elsewhere when the seller’s vehicle arrives ready for unloading and the goods are at the nominated carrier/person’s disposal.	Buyer. If requested by the buyer or customary in the trade, the seller may contract carriage at the buyer’s risk and cost, unless otherwise agreed.	No.	Depends on the delivery point; seller loads when delivery is at its premises.	Seller export; buyer import and transit.	Buyer wants carrier/rate control; container or multimodal cargo; a clear inland delivery point is available.
CPT	When the seller hands the goods to the carrier; with multiple carriers and no agreed point, often the first carrier.	Seller pays to the named destination.	No.	Buyer, unless unloading is included in the seller’s carriage contract.	Seller export; buyer import and transit.	Seller has freight buying power; buyer accepts early risk transfer and arranges insurance.
CIP	Same as CPT: risk transfers on handover to the carrier, not at destination.	Seller pays to the named destination.	Yes; broad cover under Institute Cargo Clauses (A) or similar, generally at least 110% of contract price unless otherwise agreed.	Buyer, unless included in carriage.	Seller export; buyer import and transit.	Multimodal trade where seller provides both freight and insurance; valuable cargo or documentary payment.
DAP	On the arriving means of transport at destination, ready for the buyer to unload.	Seller pays to destination/delivery point.	No.	Buyer.	Seller export and transit; buyer import.	Seller can arrange delivery deep into the buyer’s country but will not unload or pay import duties.
DPU	After the seller unloads and places the goods at the buyer’s disposal at destination.	Seller pays to destination and unloading.	No.	Seller.	Seller export and transit; buyer import.	Seller controls unloading equipment, labour and safety at destination.

Selection by operating situation

Business situation	Rule commonly considered	What must be locked before signing
Buyer has strong freight contracts and wants to nominate the carrier	FCA	Exact delivery point, pickup window, loading/unloading at delivery and transport-document mechanism.
Seller buys freight; buyer bears transport risk and buys insurance	CPT	Risk-transfer point, first carrier, destination, unloading cost and delivery notice.
Seller buys freight and must provide insurance	CIP	Coverage, insured amount, the insured party or person entitled to claim, exclusions, documents and attachment date.
Seller delivers to destination; buyer can unload	DAP	Delivery point, site restrictions, waiting/unloading charges and buyer’s import capability.
Seller must deliver the goods already unloaded	DPU	Unloading equipment, safety, permits, site access and consequences of delayed import clearance.

DOCUMENTS AND DATA TO CHECK

Document/data	Prepared/issued by	Fields that must align	Use in the process
Sales contract / Purchase Order	Seller and buyer	Rule, 2020 edition, precise place/point, delivery period, unloading and additional terms.	Select the rule and lock responsibilities.
Freight quotation and route plan	Carrier/forwarder	Pickup/delivery points, terminal, main carriage, unloading, local charges, transit and exclusions.	Verify that actual logistics scope matches the selected rule.
Booking / transport / receipt documents	Carrier/forwarder/warehouse	Shipper, consignee, receipt/delivery point, first carrier, receipt date and proof of delivery.	Evidence the delivery and risk-transfer milestone.
Insurance documents	Insurer/broker/seller under CIP	Cover, insured amount, route, effective date, the insured party or person entitled to claim, exclusions and claims process.	Before delivery and documentary presentation.
Export/import file	Seller, buyer and customs agents	Importer/exporter of record, licences, HS, value, origin, duties and filing milestones.	Confirm each party can perform its clearance obligations.
Unloading plan / site survey	Buyer, seller, warehouse and unloading contractor	Address, receiving hours, floor loading, door dimensions, lifting equipment, labour, safety and permits.	Critical for DAP/DPU.
L/C or documentary payment terms	Banks and trading parties	Transport document, on-board notation, insurance, place and shipment/delivery dates.	Avoid conflict between the rule and documentary requirements.

SELECTION AND APPLICATION PROCESS

Map the route from the seller’s premises to final receipt, including every carrier, terminal and unloading point.
Decide who should control main carriage: buyer control points toward FCA; seller control points toward CPT/CIP or DAP/DPU.
Select the desired risk-transfer point: early delivery to a carrier or arrival at destination.
Determine insurance responsibility: use CIP when seller-procured cover is required; otherwise allocate insurance expressly.
Determine who unloads and whether that party has legal authority, equipment, labour and site access.
Check customs capability: all five rules leave import clearance to the buyer; DAP/DPU do not mean seller-paid import duties.
Draft the term as rule + exact named place/point + “Incoterms® 2020”; for CPT/CIP also clarify the carrier-delivery point where needed.
Align the sales contract with the quotation, booking, transport document, insurance, L/C, PO and delivery SOP.
Define proof of delivery and the incident/claims process for the period of risk borne by each party.

Recommended drafting: Example wording: “CIP Buyer’s warehouse at the fully stated address, Incoterms® 2020” — and state the carrier-delivery point where risk timing needs to be controlled.

RISKS AND COMMON ERRORS

Error	Cause	Impact	Control
Assuming the freight payer bears risk	Confusing destination with delivery under CPT/CIP.	Claims disputes after in-transit loss or damage.	State the delivery/risk point separately from destination and arrange insurance.
Naming only a city or port	Terminal, warehouse, gate or point is omitted.	Unclear on-carriage, waiting, handling and delivery responsibility.	Use an exact address/point and allocate costs beyond it.
Choosing DPU without unloading capability	No site or equipment review.	Delay, waiting charges, damage or safety breach.	Complete a site survey and unloading contract before pricing.
Treating DAP as duty paid	DAP is confused with DDP.	Cargo is held because buyer has not cleared or paid duties.	Confirm importer of record, permits and buyer’s duty budget.
Late carrier nomination under FCA	The contract lacks nomination deadlines.	Seller cannot deliver on time; storage and truck waiting arise.	Set nomination deadline, pickup window and no-show rules.
Treating CIP as absolute all-risk cover	Exclusions, deductible and temporal scope are not reviewed.	Loss may fall outside cover.	Review the policy/certificate and agree additional cover.
Omitting the Incoterms® edition	Only the three-letter code is stated.	Dispute over the applicable edition.	Write “Incoterms® 2020”.
Using Incoterms® to determine title/payment	The sales contract omits separate clauses.	Legal gaps on ownership, payment and remedies.	Draft title, payment, governing law and dispute clauses separately.

AUTHORITATIVE SOURCES

Incoterms® 2020 are ICC rules in force since 1 January 2020 and remain the most recent edition identified by ICC as of the review date, 21 July 2026. The sources below are official ICC materials.

Official source	Purpose	Application note
ICC – Incoterms® rules	Explains how Incoterms® allocate tasks, costs and risks between seller and buyer.	Foundation source; it does not replace the full Incoterms® 2020 publication.
ICC – Incoterms® 2020	Confirms the 2020 edition and changes concerning FCA, CIP insurance and the DAT-to-DPU rename.	Contracts should state “Incoterms® 2020” and an exact named place/point.
ICC Digital Library – Rules for any mode	Official detail on delivery, risk, carriage, insurance, clearance and unloading under FCA, CPT, CIP, DAP and DPU.	This article is a practical summary; consult the full rules for drafting and disputes.
ICC – Practical wallchart	Quick comparison of obligations, costs and risks under all 11 rules.	ICC states that the wallchart should be used together with the rulebook.
ICC Academy – CPT or CIP?	Clarifies their common risk-transfer mechanism and CIP’s additional insurance obligation.	Additional cover, exclusions and documentary requirements must be agreed in the contract/credit.

ICC Incoterms® 2020 ICC Digital Library ICC Wallchart

FAQ

1. Which rule is best for container cargo?

There is no universal answer. FCA often fits buyer-controlled carriage; CPT/CIP fit seller-procured freight; DAP/DPU fit seller-controlled delivery to destination.

2. Is insurance the only difference between CPT and CIP?

Their delivery, risk, carriage and clearance structure is largely the same. The central difference is the seller’s insurance obligation under CIP.

3. What is the difference between DAP and DPU?

DAP delivers on the arriving vehicle ready for the buyer to unload. DPU requires the seller to unload before delivery is complete.

4. Who bears damage after handover to the carrier under CPT?

Normally the buyer, because risk has transferred. The buyer should arrange insurance and an appropriate claims mechanism.

5. Does CIP insure every possible loss?

No. Institute Cargo Clauses (A) provide broad cover but still contain exclusions, conditions and deductibles. Special risks should be agreed separately.

6. Do DAP or DPU include import duties?

No. Import clearance and duties are for the buyer. DDP should be considered only if the seller is legally and operationally able to import.

7. Can FCA be used when an L/C requires an on-board bill of lading?

Incoterms® 2020 provides an optional mechanism: if agreed, the buyer instructs its carrier to issue an on-board B/L to the seller. Carrier capability and bank wording should be checked before contracting.

APPLICATION NOTE: Incoterms® is a registered trademark of the International Chamber of Commerce. This article is an operational summary and does not reproduce or replace the full Incoterms® 2020 rules. Selection depends on the goods, route, customs capability, carriage contract, insurance, payment method and actual delivery point.

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