Incoterms 2020

Incoterms 2020 are international trade rules published by the International Chamber of Commerce. They define delivery responsibilities between a seller and a buyer in a commercial contract. For a container shipment, they help identify who arranges collection, loading, export clearance, main carriage, import clearance, onward delivery, insurance where required, and terminal handover.

The rules are not a complete contract. They do not decide ownership of the goods, ownership of the shipping container, payment dates, credit terms, product specifications, breach-of-contract remedies, customs valuation, VAT treatment, duty liability, or insurance adequacy. Those points must be agreed separately, with appropriate commercial, legal, customs, tax, freight, and insurance support.

For current Incoterms wording and training, check the International Chamber of Commerce at iccwbo.org. UK import and export processes should also be checked against official guidance at gov.uk and trade support at trade.gov.uk.

Why Incoterms matter when a container is involved

A shipping container is both transport equipment and, in many projects, a storage asset. That makes the practical handover point important. A buyer may agree a trade term that appears simple, then discover that they are responsible for export clearance, port charges, demurrage, detention, customs paperwork, domestic haulage, crane delivery, unloading, cargo damage, or storage delays.

For containerised cargo, the named place in the Incoterm is critical. A named factory, depot, port terminal, port of destination, inland terminal, or customer site can each create a different responsibility. The named place should be written clearly in the contract and matched to the freight plan, container route, delivery address, and site access.

Acorn Containers can help customers think through the container side of the decision, including whether the unit is being bought, hired, exported, modified, stored, delivered empty, delivered loaded, or positioned for ongoing site use. For a broader introduction to container movement, see the guide to understanding intermodal containers.

Key Incoterms used in container shipping

Incoterms are usually grouped by how much responsibility sits with the seller or buyer. The right term depends on the commercial deal, the transport route, the parties involved, and the ability of each party to manage freight and customs.

• EXW, Ex Works: the seller makes the goods available at its premises or another named place. The buyer usually carries the widest burden, including collection, loading risk unless agreed otherwise, export process, main carriage, import process, and final delivery.
• FCA, Free Carrier: the seller delivers the goods to the carrier or another named party at a named place. For containers, FCA is often more practical than FOB because the seller may hand the container to a terminal or carrier before the vessel loading stage.
• CPT, Carriage Paid To: the seller pays carriage to a named destination, but risk transfers earlier when the goods are handed to the carrier.
• CIP, Carriage and Insurance Paid To: the seller pays carriage and must arrange insurance to the named destination, but buyers should still check whether the insurance level suits the cargo and route.
• DAP, Delivered at Place: the seller delivers to a named destination ready for unloading. The buyer usually handles import clearance and unloading unless agreed otherwise.
• DPU, Delivered at Place Unloaded: the seller delivers and unloads at the named place. This can be difficult where the unloading site lacks equipment, ground bearing capacity, or safe access.
• DDP, Delivered Duty Paid: the seller takes broad responsibility for delivery and import clearance to the named destination. It can be unsuitable where the seller is not properly set up to act as importer or deal with local tax and customs duties.
• FOB, Free on Board: risk transfers when the goods are on board the vessel. It is a sea and inland waterway rule, but it is often less suitable for containerised cargo handed to a terminal before loading.
• CFR and CIF: these sea and inland waterway rules are used where the seller arranges carriage to a destination port. CIF also requires insurance, but buyers should check the level and exclusions.

Choosing an Incoterm should involve the commercial contract, freight forwarder, customs agent, and insurer where needed. It should not be chosen only because it appears familiar on a purchase order or supplier invoice. For more background, read Acorn’s guide to Incoterms 2020.

FCA and FOB for containerised cargo

FCA is often a better fit for containerised shipments because containers are commonly delivered to a carrier, depot, or port terminal before being loaded onto a vessel. The seller may not control the container once it has entered the terminal. That means FOB can create a mismatch between the written risk point and the real handover process.

FOB still has a place in some sea freight trades, but it should be used carefully for containers. Where the container is sealed and handed to a terminal operator, the seller may be unable to verify the exact moment the container is placed on board. This can lead to disputes if cargo damage, delays, inspections, or loss occur between terminal handover and vessel loading.

When using FCA, the named place should be precise. Examples include the seller’s premises, a freight forwarder’s depot, an inland rail terminal, or a port container terminal. The contract should also state who is responsible for loading at the named place, export clearance, security sealing, verified gross mass requirements where applicable, and evidence of handover.

Costs, risk, and hidden charges to check

Incoterms help allocate certain costs, but they do not eliminate the need for a detailed quote and a written scope. A container shipment can involve several parties, including supplier, buyer, haulier, depot, port, shipping line, freight forwarder, customs agent, insurer, and final delivery contractor.

• Collection and loading: check who supplies lifting equipment, labour, dunnage, blocking, bracing, and load restraint.
• Export process: check who handles export declarations, licences, commodity information, origin documents, and any restricted-goods controls.
• Port and terminal charges: ask who pays for terminal handling, storage, examination, amendment, and port security fees.
• Freight and inland haulage: confirm whether the quote covers the complete movement or only the ocean, road, or rail section.
• Import process: check who is the importer of record, who pays VAT and duty, and who deals with customs queries.
• Insurance: confirm whether cargo insurance is required, who arranges it, what is insured for, and which exclusions apply.
• Delay risk: consider demurrage, detention, quay rent, missed delivery slots, customs holds, port congestion, and rejected site access.
• Final placement: confirm who unloads, who provides the crane or HIAB, and who is responsible for ground preparation.

These points can affect cash flow, delivery timing, cargo condition, and liability. They should be checked before the container leaves the supplier, not after it reaches the UK port or customer site.

Container condition and export suitability

The right container condition depends on whether the unit is for static storage, domestic transport, export shipping, temperature-controlled goods, plant, machinery, or modified use. A container suitable for on-site storage may not be suitable for international shipping.

One-trip containers are usually manufactured overseas and used for a single loaded movement before being sold in the UK. They are often chosen when appearance, door operation, long service life, and export potential matter. Used containers vary by age, cosmetic condition, repair history, floor condition, door seals, corrosion, and previous cargo exposure.

Wind and watertight means the unit is intended to keep out wind and rain for storage use. It does not automatically mean the container is suitable for export. Cargo-worthy means the unit has been assessed as suitable for carrying cargo, subject to carrier acceptance and any necessary certification. IICL is a higher repair standard commonly used in leasing and shipping-line contexts. A CSC plate means a container has a safety approval plate required for international movement, but the plate and inspection status must be valid for the intended shipment.

For new storage units, see new build shipping containers. For common dry storage options, compare 20ft shipping containers and 40ft shipping containers.

Choosing the right container type

Container type affects loading method, delivery access, export acceptance, and storage performance. A standard dry container suits many palletised and boxed goods. A high-cube container provides extra internal height, which helps with taller cargo, racking, machinery, and some conversion projects.

A 10ft container is useful where space is tight, but many 10ft units are cut down or storage-focused and may not be suitable for shipping. A 20ft container is often the most flexible size for site storage, export cargo, and smaller business use. A 40ft container gives more internal length but needs more delivery space, turning room, level ground, and planning around the door swing.

Specialist types should be chosen around the cargo and handling method. Open-top containers help where goods are craned in from above. Flat racks suit out-of-gauge machinery and heavy items that cannot be loaded through standard doors. Refrigerated containers, also known as reefers, control temperature for suitable goods but need power, airflow planning, monitoring, and maintenance. For specialist options, review 20ft open top containers, flat rack containers, and 20ft refrigerated containers.

Sales, hire, relocation, and return

Buying is usually considered when the container is needed for long-term storage, repeated export use, modification, branding, or a permanent site facility. Hire may suit projects with a defined duration, changing site requirements, temporary overflow storage, construction work, seasonal stock, or short-term operational use.

Hire customers should think beyond the delivery date. Collection access, relocation, return condition, damage responsibility, cleaning, lock removal, loading restrictions, and site availability can all affect the end of the hire. If a hired unit is blocked in by vehicles, stock, scaffolding, plant, or site works, collection may be delayed.

Buyers should consider aftercare, maintenance, repainting, door adjustment, condensation management, lock security, and future relocation. A container placed on poor ground can twist, making doors hard to open. A container used near the coast or in a corrosive environment may need more frequent checks. Acorn can advise on both container sales and container hire.

UK delivery and site placement checks

Final delivery is often the point at which a well-planned container project succeeds or fails. A container may be legally and commercially ready to move, but it may still be impossible to place safely if the site is unsuitable. The delivery method, access route, ground, gradient, overhead clearance, turning area, and surrounding activity must all be checked before booking.

A HIAB is a lorry-mounted crane used to lift and place a container from the delivery vehicle. It needs space for the vehicle, crane operation, stabiliser legs, slewing area, and safe exclusion zones. Other delivery methods may include articulated vehicles, skeletal trailers, side loaders, or crane-assisted placement, depending on container size, weight, and location.

• Check the full access route, including narrow lanes, parked vehicles, weak bridges, gates, bends, slopes, and low branches.
• Confirm overhead risks such as power lines, telephone lines, trees, gutters, signage, lighting, and building projections.
• Prepare firm, level, drained ground that can support the container and any delivery equipment.
• Use suitable supports under the corner castings where needed to promote airflow and reduce standing water.
• Allow for door swing, pedestrian access, loading access, forklift movements, and emergency access.
• Tell the supplier about soft ground, made-up ground, cellars, service covers, underground tanks, drains, or voids.

Vehicle limits, lorry types, and road access constraints should be checked for the planned route and site. UK lorry guidance is available from the Department for Transport at gov.uk lorry types and weights guidance. For Acorn delivery information, see container delivery.

Customs, VAT, duty, and documentation risks

Incoterms can specify who is responsible for clearing goods for export or import, but they do not replace customs law or tax rules. The importer or exporter may need accurate commodity codes, origin information, values, licences, safety and security data, commercial invoices, packing lists, transport documents, and evidence requested by authorities.

VAT, duty, and customs clearance should be checked with the relevant authority, customs agent, freight forwarder, or tax adviser. Incorrect assumptions can lead to delays, storage charges, penalties, cargo holds, rejected declarations, or disputes between buyer and seller.

Freight forwarders and customs agents can help coordinate the movement, but their role and liability should be confirmed in writing. The British International Freight Association provides information about freight forwarding at bifa.org. International maritime requirements should also be checked where cargo, container condition, dangerous goods, or vessel acceptance may be affected, using sources such as imo.org.

Common mistakes to avoid

• Using FOB for containerised cargo without checking whether FCA better matches the terminal handover.
• Assuming Incoterms decides ownership of goods, payment timing, tax treatment, or insurance payout.
• Agreeing to DDP when the seller is not able to act correctly in the destination country.
• Buying a storage-grade container for export without checking the cargo-worthy status and CSC plate requirements.
• Ignoring container weight, cargo weight, lifting method, and safe loading limits.
• Booking delivery before checking access, ground, overhead obstructions, and turning space.
• Assuming a refrigerated container only needs power, without planning airflow, set point, monitoring, and contingency.
• Leaving customs, VAT, duty, and insurance questions until the container reaches the port.
• Failing to record the named place clearly in the contract and transport instructions.

Information to prepare before asking for a quote

A clear enquiry helps Acorn Containers recommend a suitable unit and identify delivery or export issues early. The following details are useful for both sales and hire enquiries.

1. State whether you want to buy or hire, and how long the project is expected to last.
2. Confirm the intended use, such as site storage, export cargo, workshop, chilled storage, machinery movement, retail stock, or archive storage.
3. List the goods or equipment going inside, including any heavy, high-value, temperature-sensitive, fragile, hazardous, or restricted items.
4. Confirm the preferred size, or provide the cargo's length, width, height, weight, and loading method.
5. Say whether the container must be export-suitable, cargo-worthy, CSC-plated, wind- and watertight, modified, insulated, refrigerated, open-top, or flat-rack.
6. Provide the delivery postcode, site contact, access route, ground type, placement position, and any overhead or turning restrictions.
7. Confirm whether the goods are moving under an Incoterms term and identify the agreed place in the contract.
8. Speak to the relevant freight forwarder, customs agent, insurer, or authority where customs, tax, dangerous goods, or liability issues apply.