Direct answer
Incoterms 2020 are ICC rules that allocate tasks, costs, and risk on a goods sale. They do not prove the phones exist, classify lithium cargo, or set DOA. Write the three-letter rule and a named place. FOB, FAS, CFR, and CIF are for sea or inland waterway, not for an air carton of phones.
Key takeaways
- Always add a place. “FOB” alone is incomplete.
- EXW leaves export work with the buyer.
- DDP puts import clearance on the seller.
- CIF default insurance is a limited cargo clause unless you agree more.
- Recast unmatched terms before you compare unit price.
Incoterms are how two sides name the handoff. They are not a warehouse tour and not a lithium certificate.
Who this guide is for
Phone importers writing the commercial line on an RFQ. For marks and UN numbers, use shipping wholesale phones.
What the rules do
The U.S. International Trade Administration describes Incoterms 2020 as 11 ICC rules that define seller and buyer responsibilities. Each rule clarifies tasks, costs, and risks. ICC publishes the official set.
ITA groups them as:
- Any mode: EXW, FCA, CPT, CIP, DAP, DPU, DDP
- Sea or inland waterway: FAS, FOB, CFR, CIF
ICC also notes that CIF keeps Institute Cargo Clauses (C) as the default insurance level, while CIP requires a higher cover aligned with Clauses (A) unless the parties agree otherwise.
Phone-lot reading
| Rule | Buyer-facing meaning | Common phone-lot mistake |
|---|---|---|
| EXW (place) | You take the goods at the seller’s site and run export | Cheapest unit, untrained shipper |
| FCA (place) | Seller hands goods to your carrier | Still called FOB on air |
| CPT / CIP (place) | Seller pays carriage. Risk can move earlier than arrival | Thinking paid freight means paid risk |
| DAP / DPU (place) | Seller delivers, DPU includes unload | No lithium shipper named |
| DDP (place) | Seller delivers duty paid | Assuming they also classify UN 3481 |
| FOB / CFR / CIF (port) | Sea or waterway handoff | Used on a passenger-airport carton |
Accept / Clarify / Reject
| Quote | Accept | Clarify | Reject |
|---|---|---|---|
| “FCA Shenzhen warehouse, Incoterms 2020” | Place is real | Warehouse unnamed | Three letters only |
| Air phones + CIF | Recast | “CIF airport” | Left as CIF |
| DDP your city | Who is importer of record | Duty estimate only | Seller cannot import |
| “Door to door” | Mapped to a 2020 rule | Courier slogan | No rule, no place |
How to write the line
- Choose the mode first. Air lots should use an any-mode rule.
- Write
Incoterms 2020, the three letters, and the place. - Name who offers the lithium shipment.
- Name insurance if the rule does not include it, or if CIF’s default cover is too thin.
- Keep payment and DOA as separate clauses.
- Recast unmatched quotes in the landed-cost calculator.
Related guides
Frequently asked questions
Which Incoterm should a first phone import use?
There is no official default. Choose the rule that matches the work you can actually do. If you cannot export or classify UN 3481, do not start on EXW because the unit price is lowest.
Do Incoterms decide who pays a DOA return?
No. They cover the contracted movement of the goods. Write returns on their own clause.
Sources and methodology
- Incoterms 2020 — International Chamber of Commerce Accessed August 22, 2026.
- Know Your Incoterms — U.S. International Trade Administration Accessed August 22, 2026.
- IATA lithium batteries — International Air Transport Association Accessed August 22, 2026.
Update history
- — First published. Official sources on this page were accessed on this date unless a later note says otherwise.
Factual corrections after publication are listed on the corrections page. There is no separate reviewer identity on this desk. See the editorial policy.