Guide · Customs

Incoterms 2020 explained for Spanish exporters

An Incoterm is three letters that decide who arranges and pays for transport, who clears customs, who insures the goods, and exactly where risk passes from seller to buyer. Pick the wrong one and a quote that looked cheap leaves you carrying costs — or liability — you never priced in. Here are the Incoterms 2020 rules that matter for road freight from Spain, in plain terms.

7 min read

What an Incoterm actually decides

Incoterms (International Commercial Terms, published by the International Chamber of Commerce) are a shared vocabulary for who does what in a sale of goods. Each three-letter rule fixes four things: who arranges and pays for the carriage, who handles export and import customs, who bears the cost of loss or damage, and the precise point where that risk passes from seller to buyer.

Always state the named place after the rule — "DAP Manchester" or "FCA Barcelona", not just "DAP". The place is where delivery, and usually risk transfer, happens, so leaving it off is the single most common source of disputes.

The rules you will use for EU road freight

Seller does least: EXW and FCA

Under EXW (Ex Works) the seller just makes the goods available at its own premises and the buyer arranges everything, including export clearance — which is awkward, because the buyer often cannot file a Spanish export declaration. FCA (Free Carrier) is the cleaner choice: the seller hands the goods to the buyer's carrier at the seller's dock or a named point and handles export clearance, then risk passes to the buyer.

Seller pays carriage: CPT and CIP

Under CPT (Carriage Paid To) and CIP (Carriage and Insurance Paid To) the seller pays for transport to a named destination, but risk passes early — when the goods are handed to the first carrier, not on arrival. CIP adds that the seller must buy insurance for the buyer. The gap between where risk passes and where carriage ends is the part people miss.

Seller delivers to destination: DAP, DPU and DDP

DAP (Delivered At Place) means the seller delivers, ready for unloading, at the named destination and bears all risk to that point — the most common term for door delivery on EU road freight. DPU (Delivered at Place Unloaded) is the same but the seller also unloads. DDP (Delivered Duty Paid) goes furthest: the seller also clears import customs and pays any duty and import VAT in the destination country.

Who clears customs

Inside the EU single market there is no customs step, so the Incoterm only governs carriage and risk. For non-EU destinations such as the UK and Switzerland, the Incoterm decides who is the exporter and importer of record. Under FCA or DAP the seller clears export and the buyer clears import; under DDP the seller is responsible for both ends. On our managed non-EU corridors the declarations themselves are filed by licensed customs-broker partners in the destination country — but the Incoterm still decides whose account they are filed on, and who pays the duty.

Where risk passes — and why insurance follows it

Risk transfer is not the same as who paid for transport. Under CPT or CIP risk passes at the first carrier in Spain, even though the seller paid carriage to the destination; under DAP it passes on arrival. Whoever holds the risk for a leg should hold the cargo insurance for it. A carrier's CMR liability is capped at about 8.33 SDR per kilo and does not equal the value of your goods, so all-risk cargo insurance is a separate decision — see our claims and insurance guide.

Common choices and the traps

For Spain-origin road freight, FCA and DAP cover most cases: FCA when the buyer controls the main carriage, DAP when the seller quotes door to door. EXW looks simple but leaves the buyer unable to prove export from Spain, which can break VAT zero-rating, so FCA is usually safer. DDP looks buyer-friendly but makes the seller liable for foreign import VAT and duty it may not be able to reclaim; quote it only when you understand the destination's tax rules.

How the Incoterm changes your quote

When you ask for a freight price, the Incoterm tells us what to include. A DAP quote covers carriage and delivery to the door; a DDP quote also has to budget for the broker's import entry, duty and import VAT; an FCA quote may only cover the run to a buyer's hub. Tell us the Incoterm and named place at quote stage so the written quote reflects exactly the legs you are buying — no gaps, no surprises.