Incoterms 2020: comparing food raw material prices

An Incoterms rule only applies if the contract names it, with a precise place and the year of the version: “EXW (exact address of the site) Incoterms 2020”. Without the year, a dispute over which version applies becomes hard to settle. The rules also apply between two French companies. They say nothing about the price, payment or the transfer of ownership.

Under EXW, the supplier does not have to load the goods or clear them for export. It places them at your disposal at the agreed place, and the risk passes to you at that moment, before loading. In practice, its forklift driver often loads your truck: agree in writing who carries the risk of that loading.

For a purchase from outside France, as French customs points out, the ICC advises keeping EXW for domestic or regional trade, with no export, and preferring FCA, under which export clearance falls to the supplier.

The named place decides everything. FCA at the supplier's premises: it loads your truck, and the risk passes to you once the goods are loaded. FCA at another place, a warehouse or a terminal: it brings the goods there on its vehicle, ready for unloading, and does not unload them. In both cases, export clearance is its responsibility, the main carriage yours.

For a buyer of pallets, “FCA (supplier's site) Incoterms 2020” settles the loading question that EXW leaves open. A price marked “départ usine, chargé” (ex factory, loaded) amounts in practice to FCA.

These rules have two critical points: the cost passes on arrival, the risk at departure. The place named after CPT or CIP is the destination of the transport, not the place of delivery. If the journey involves several carriers, a truck to the port then a ship for example, the risk passes to you from the first one, at a place the supplier chooses. For it to pass elsewhere, at the port of shipment for example, write it into the contract.

Under CPT, no one is required to insure the goods: the ICC advises the buyer to insure itself. Under CIP, the supplier takes out insurance for you that complies at least with clauses (A) of the Institute Cargo Clauses, or equivalent, for 110% of the contract price, from the place of delivery to at least the destination. In the event of a loss, you claim directly from the insurer.

For a container, these rules are a trap. The container is handed over at the terminal before it is loaded: under FOB, the supplier keeps the risk until it is on board, while the goods are already in the terminal's hands. For a refrigerated container, that is where its power connection and its temperature are at stake. The ICC recommends FCA instead of FOB, and CPT or CIP instead of CFR or CIF. French customs says so too: the maritime rules are reserved for bulk and conventional sea transport.

Under CIF, the insurance the supplier pays for is at least that of clauses (C): named events, such as fire, sinking or collision. It leaves out almost everything that damages a foodstuff: inherent vice, delay, temperature. The parties can agree on wider cover. Also name the port of shipment: that is where the risk passes, even if the contract only cites the port of arrival.

DAP: the goods are at your disposal on the arriving vehicle, ready for unloading. Unloading, import clearance, duties and taxes are for you. If you are slow to clear the goods, the risk on the goods waiting at the port is also yours.

DPU: the only rule under which the supplier must unload. Since 2020 it has replaced DAT, which only applied at a terminal: the place can be any place, provided the goods can be unloaded there.

DDP: the supplier does everything, up to import clearance and payment of the duties. A supplier established outside the EU cannot itself be the customs declarant: it needs a representative established in the EU, under indirect representation, who is liable with it for the customs debt. These costs and guarantees are in its price. The ICC recommends DAP to a supplier that cannot clear goods for import.

For a foodstuff imported from a third country, clearance also involves health checks, whatever the rule. The importer prepares them: you, except under DDP.

• Products of animal origin, including fishery products and dairy products: a check at the border control post and a common health entry document (CHED, or CHED-P), notified at least one working day before arrival.
• Fruit, vegetables and plants: a phytosanitary certificate, except for pineapple, coconut, durian, banana and date.
• Certain high-risk foods of non-animal origin, such as nuts or spices from certain origins: increased checks and a CHED (CHED-D).
• Wild-caught fishery products: a catch certificate validated in the CATCH system, mandatory since 10 January 2026. Aquaculture is not affected.

In the official French names of the rules, “franco” even refers to a sale at departure: FCA is called “franco transporteur” (Free Carrier), FAS “franco le long du navire” (Free Alongside Ship), FOB “franco à bord du navire” (Free On Board). A buyer who reads “franco” as “delivered to my site” reads the opposite.

Yet ownership passes in principle as soon as there is agreement on the goods and the price, and the transfer of ownership carries the transfer of risk (Code civil, art. 1196, the French civil code). The Cour de cassation, France's highest court, has consistently held that the franco clause only concerns transport costs and does not delay the transfer of ownership: in 1983, in 1986 for fruit trees that died in transit, in 1998.

The risk remains with the supplier in particular when:

• its terms or your order provide for delivery to your site, or for transport at its risk;
• it has retained ownership until payment, with no clause transferring the risk to you;
• the goods are sold by weight, by count or by measure, and have not yet been weighed, counted or measured (Code civil, art. 1585).

For the supplier to carry the risk up to your dock, write “DAP (exact address of the site) Incoterms 2020”, or DPU if it must unload. For a price at which you collect the goods, prefer “FCA (supplier's site) Incoterms 2020” to “départ usine”. Settle separately the retention of title and which weighing is binding, at departure or on arrival: the Incoterms say nothing about them.

On delivery, the time limit that closes off recourse against the carrier is very short in domestic road transport:

In international road transport (CMR), you have seven days, Sundays and public holidays excluded, to send written reservations about damage that is not apparent. And a temperature out of specification is damage, even if the goods are not spoiled: the Cour de cassation held so on 9 February 2016.

The consignee had refused delivery, although the analyses found the goods fit for consumption. The standard contract for “temperature-controlled perishable goods” caps compensation: for a consignment of 3 tonnes or more, €14 per kilo of gross weight, up to €4,000 per tonne of the consignment, unless a value has been declared. Even a claim you win can leave you with a loss.

Equipment carrying perishable foodstuffs must comply with the ATP agreement of 1970. France also applies it to domestic transport: for frozen food, heavily insulated mechanically refrigerated equipment of class C or F, or heavily insulated refrigerated equipment of class C (code rural, art. R. 231-45, the French rural code).