Incoterms

Incoterms 2020 contains eleven rules. Seven apply to any mode of transport — EXW, FCA, CPT, CIP, DAP, DPU, DDP — and four apply only to sea and inland waterway transport: FAS, FOB, CFR and CIF. The 2020 revision renamed DAT to DPU and raised the insurance level required under CIP.

An Incoterm settles three questions and no others: who pays for which leg, where the risk of loss passes, and who handles export and import formalities. It is not a payment term, not a transfer of ownership and not a substitute for a transport contract.

For a freight broker the Incoterm decides who is actually the customer and who pays the invoice, which is why it belongs on the quote request rather than in a later phone call. Cargavo is a TMS for freight brokers and prices the movement it is asked to price; it does not file customs declarations and has no customs or EDI connection.

Cargavo is a TMS for freight brokers, and in European road freight only the any-mode rules are relevant — the four maritime rules should never appear on a truck movement.

The maritime-only rules are FAS, FOB, CFR and CIF. Using FOB for a container that never leaves a truck is one of the most common documentation errors in international trade.

The gap between the cost point and the risk point is where most disputes are born. Reading the two columns separately prevents almost all of them.

In a TMS for freight brokers, the practical consequence is simpler than the theory: the Incoterm tells you which party will accept your quote and which party will pay your invoice.

Whichever is chosen, someone becomes the broker's customer for that shipment. Cargavo is a TMS for freight brokers and keeps each of them as a distinct customer with its own margin rule and its own portal access.

• EXW — the buyer organises everything from the seller's door. The broker's customer is the buyer.
• FCA — the seller hands over to a carrier at a named place. Cleaner than EXW because export clearance is the seller's.
• DAP — the seller delivers to the named place, not unloaded. The broker's customer is the seller.
• DDP — the seller also clears import and pays duties and taxes, which requires a presence or a representative in the destination country.

Within the European Union's customs union there is no import clearance on intra-EU movements, which is why DAP and DDP behave almost identically on a French-to-German lane and very differently on a French-to-Swiss one.

Three errors account for most of the damage, and all three are avoidable at the quotation stage:

1. EXW with seller loading — under EXW the buyer bears loading. If the seller loads anyway, the risk position no longer matches reality. FCA is almost always the better rule.
2. FOB on a truck — FOB is a maritime rule tied to a vessel. On a road movement it leaves the delivery point undefined.
3. DDP without representation — the seller must be able to clear import and account for local taxes, which usually requires registration or a fiscal representative.

Limits. Cargavo is a TMS for freight brokers, not a customs system: it does not lodge declarations, calculate duties or verify Incoterm compliance. It has no carrier API and no EDI, is not a freight exchange and not a fleet management tool. It prices from the rate grids you rebuild, in four languages from 49 EUR per month, and in seven currencies from the Growth plan with a 14-day trial.