Purchase terms / B2B
Read the Incoterms rule with its named place
An Incoterms 2020 abbreviation alone is incomplete for planning. Put the chosen rule, the named delivery place or port, and “Incoterms 2020” in the sale contract. Then check separately who buys each carriage leg, who bears risk at hand-off, and who handles export and import formalities.
Why the named place matters
The International Chamber of Commerce (ICC) distinguishes seven rules usable with any mode from four intended for sea and inland waterway transport. The named point anchors where obligations change. A quote written “FOB” without a port or “DAP” without a destination leaves a material question unanswered.
Ask three separate questions
- Delivery and risk: where is the seller's delivery obligation fulfilled, and from what point does the buyer carry transit risk?
- Transport cost: which party books and pays the main carriage, onward delivery, insurance and local charges?
- Formalities: which party handles export and import clearance, permits, duties and taxes under the chosen rule?
Do not infer that paying freight always means bearing the same segment's risk. Read the specific rule and sale contract together. The ICC notes that Incoterms do not replace every other contract term; the goods, price, payment, ownership transfer and remedies still need their own terms.
Bring the rule into the freight comparison
Before using our mode guide, record the named origin and Australian delivery point, the rule and version, packaging units, and which charges your supplier's quote already includes. Request the same scope from each forwarder. If customs or biosecurity responsibility is unclear, ask a qualified professional before shipment.
For the official classification of the rules, see the ICC Incoterms 2020 questions and answers and the ICC guide description. Source checked 2026-10-05; this page is an educational checklist, not the full rule text or legal advice.