Loading is where risk changes owner, and the rule names the exact metre.
Incoterms are three letters on an order that decide who pays the freight, who insures the cargo, who clears it, and at which physical point a loss stops being your problem and becomes theirs.
Two companies agree a price and forget to agree who is paying to move the goods.
The difference between the cheapest answer and the most expensive one runs to several per cent of the invoice, and it is settled by three letters that neither side reads carefully.
What a rule actually allocates
An Incoterm splits obligations between seller and buyer: who arranges carriage, who pays for it, who insures the cargo, who handles export and import clearance. It also fixes the point of delivery. That point is where risk passes, and it is the part people skip.
Cost and risk are separate questions. There are rules where the seller pays for carriage well past the point where the risk has already moved to the buyer, and that combination surprises people the first time a container is damaged in transit.
Eleven rules, one published set
The International Chamber of Commerce publishes 11 rules in Incoterms 2020. Seven work for any mode of transport, four apply only where the carriage is by sea or inland waterway.
Two misunderstandings come up constantly, and both are expensive.
They are not law. They apply because the contract says they apply, which means the version matters. An order that says a rule without saying which edition is inviting an argument later.
They are not complete without a place. The rule and the named place work together, and the named place is the metre where responsibility changes hands. A rule quoted alone is half a term.
Where the money moves
Choosing a rule at the seller's end moves cost and control to the buyer. Choosing one at the buyer's end moves cost and control to the seller, and with them the freight, the insurance and often the import formalities.
Neither is generous. Whoever controls the carriage controls the price of it, and the party that does not control it is paying a number they did not negotiate.
The practical rule we use: whoever is better at moving goods in that country should arrange the carriage there, and the price should be adjusted to reflect it. That is a commercial conversation, and it belongs on the order at Stage 1.
What I got wrong
I used to think choosing an Incoterm was mostly about cost.
It is about control, and cost follows from it. Whoever arranges the carriage negotiates its price, sees the invoices and can change carrier when the service slips, while the other side pays a number that arrives fully formed. I had the causation backwards for years.
What the full version will add
A rule-by-rule table of who pays what, with the delivery point drawn for each.
I am building it against the published 2020 text rather than copying one of the many charts in circulation, several of which contradict each other on the same rule.
Find the Incoterm on your last three orders. Write down the rule, the named place, and the edition.
If the named place is missing on any of them, the delivery point is not agreed. Add it to your order template today: the rule alone does not tell a court or an insurer where the risk passed.
ICC, Incoterms 2020 — eleven rules, seven for any mode, four for sea and inland waterway.
Read alongside Stage 1, where the rule is chosen, and Stage 6, where the transport document has to match it.