Use FCA when you want the buyer to control the carrier and you want your risk to end at loading. Use CPT when the seller books and pays the transport but the buyer accepts the risk from the moment the goods are handed to the first carrier. Use DAP when the buyer wants a delivered price and the seller is prepared to carry the risk all the way to the named place.
The rule that catches people out is CPT, because cost and risk separate. The seller pays for a journey whose risk the buyer already owns. On frozen goods, where the journey is exactly where the value can be destroyed, that separation is not a technicality.
| Criterion | FCA | CPT | DAP |
|---|---|---|---|
| Full name | Free Carrier | Carriage Paid To | Delivered At Place |
| Risk passes | On loading at the seller’s premises, or when placed at the disposal of the buyer’s carrier at the named place | When the goods are handed to the first carrier | On arrival at the named place, goods ready for unloading |
| Who contracts carriage | Buyer | Seller | Seller |
| Who pays carriage | Buyer | Seller | Seller |
| Insurance obligation | Neither party is obliged to insure | Neither party is obliged to insure | Neither party is obliged to insure |
| Export clearance | Seller | Seller | Seller |
| Import clearance and duty | Buyer | Buyer | Buyer |
| Unloading at destination | Not applicable | Not applicable | Buyer, unless agreed otherwise |
| Who owns a temperature failure in transit | Buyer, from loading | Buyer, from handover to the first carrier | Seller, until arrival |
| Cold chain suitability | Good, where the buyer controls a reliable reefer operator | Weakest of the three for frozen goods | Strongest alignment of risk and control |
| Best for | Buyers with their own logistics | Sellers who want to sell a landed-looking price without carrying transit risk | Buyers who want one number and one counterparty |
When to choose FCA
Choose FCA when the buyer has a reefer operator it trusts and wants to control the movement. The buyer books the truck, sets the temperature instruction, chooses whether a second logger goes in the load and decides how the cold chain evidence is collected. For a buyer running regular lanes into its own cold store, that control is worth more than the convenience of a delivered price.
Choose FCA when you want a clean, early, provable risk transfer. Loading at a named premises is an observable event with a timestamp, a CMR signature and, on frozen goods, a loading temperature record. Compared with a mid-journey handover, it is much harder to argue about.
Choose FCA when the buyer wants transparency on freight. Under FCA the freight is the buyer’s own contract at its own rates, which removes the question of what margin sits inside a delivered price.
Choose FCA when the seller genuinely cannot influence the transport. A processor without a logistics arm should not be pricing carriage it cannot control, and FCA is the honest term for that position.
What FCA demands in return: the buyer has to be organised. The truck has to arrive pre-cooled, on time, at a slot the plant can serve, with the right equipment class. A late or warm truck under FCA is the buyer’s problem, and if the goods have already been loaded, the temperature history from that moment is the buyer’s too. FCA against EXW for frozen food covers what that means in a claim.
When to choose CPT
Choose CPT when the seller is best placed to arrange transport – typically because it moves regular volumes on the lane and gets better rates – but is not prepared to underwrite the transit risk on a temperature-sensitive cargo.
Choose CPT when the buyer wants a single price to a destination without taking over the booking, and understands and accepts that the risk passed at the start of the journey.
Choose CPT when the goods are not especially fragile in transit and the practical risk is low. For an ambient commodity, the cost-risk separation is a manageable abstraction. That is much less true for frozen food.
For frozen goods, CPT is the term to enter with your eyes open, because it produces a specific and avoidable dispute. If the reefer fails halfway, the goods are at the buyer’s risk even though the buyer never chose the carrier, never saw the equipment and has no contractual relationship with the haulier. The buyer’s recourse is against a carrier it did not appoint, under a contract it is not party to, subject to the liability limits in the CMR Convention rather than to the value of the goods.
If you use CPT on frozen product, the contract has to do extra work.
- Name the carriage specification: equipment class, set point, pre-cooling, and continuous temperature logging.
- Require the logger data to be released to the buyer on request, not only when there is a complaint.
- Say who claims against the carrier and who bears the shortfall between the CMR liability limit and the cargo value.
- Require cargo insurance explicitly if either party wants it, because no Incoterms rule imposes it here.
When to choose DAP
Choose DAP when the buyer wants one price, one counterparty and no transit exposure. Under DAP the seller carries the risk all the way to the named place, which for frozen food means the seller owns the reefer failure, the border delay that warms the load and the temperature excursion nobody can explain. That alignment of risk with control is the strongest argument for DAP on temperature-controlled cargo.
Choose DAP when the seller has a real logistics capability and can price it. A seller that runs the lane every week can absorb and manage transit risk far more cheaply than a buyer pricing it as an unknown.
Choose DAP when the buyer’s approval process makes a delivered price simpler internally. Landed cost is what a category manager compares, and a DAP price is close to it.
The DAP pitfalls are on the destination side. DAP means delivered ready for unloading, and unloading is the buyer’s job unless the contract says otherwise. It also means the buyer, not the seller, handles import clearance and pays duty and import VAT, which surprises buyers who read “delivered” as “everything included”. If you want the seller to clear and pay import duties, the rule you are describing is DDP, and the DDP entry sets out why DDP is often a bad idea for the seller.
What changes in your process
- Who books the truck changes who sets the temperature instruction, and therefore who has to specify it in writing. Under FCA the instruction comes from the buyer; under CPT and DAP from the seller. In every case it belongs in the transport order, not in a phone call.
- Who holds the temperature evidence follows the booking. The party that appointed the carrier gets the logger data first. Where that is not the party carrying the risk, as under CPT, the contract has to force disclosure.
- Who deals with a border delay. On the Ukraine to Poland corridor and onward, queue time is the main source of transit variance. Under DAP the seller absorbs it; under FCA and CPT the buyer does, whoever paid the freight.
- Who is the importer of record. Under all three of these rules it is the buyer, and that means an EORI number, a customs declaration, the entry formalities and, for products subject to official controls, the pre-notification. The export documentation guide sets out the sequence.
- Who pays for waiting time and demurrage. Not addressed by the Incoterms rule at all; it comes from the transport contract, which is why demurrage charges is a separate question from the delivery term.
What the table does not show
No Incoterms rule transfers title. The rules allocate cost, risk and tasks. Ownership, payment terms, retention of title, governing law and dispute resolution are all matters for the sale contract, and a contract that names a rule and nothing else has left most of the important questions open.
None of these three obliges anyone to insure. CIP and CIF carry an insurance obligation; FCA, CPT and DAP do not. On a high-value frozen consignment travelling under FCA or CPT, the buyer bears the risk from an early point with no contractual requirement that anyone has bought cover. Buy the cover deliberately.
Carrier liability is not cargo value. Road carriage between Ukraine and the EU falls under the CMR Convention, whose liability limit is calculated on gross weight rather than on the value of the goods. On a full reefer of raspberry that limit can be a fraction of the invoice. This is the single most important commercial fact behind the choice of term, and it is why a buyer under CPT should not treat “the carrier is liable” as an answer.
Name the place precisely. “DAP Rotterdam” is an argument waiting to happen; “DAP [named cold store, full address], unloading by buyer, delivery window agreed 24 hours in advance” is a term. The named place is what fixes the risk transfer point, and a vague one makes the transfer point vague.
The rule does not write the temperature clause. Incoterms say nothing about set points, pre-cooling, logger placement, permitted excursions or what happens when a logger shows a break. Those belong in the specification and the transport order. The cold chain management guide covers what to require and how to read the result.
Common mistakes, in order of frequency. Using CPT on frozen goods without a temperature clause. Writing DAP and expecting the seller to clear customs. Naming a city instead of an address. Leaving unloading unallocated under DAP. Assuming an Incoterms rule creates an insurance obligation. And agreeing a term that neither party’s operations team has read.
FAQ
Which term is safest for a frozen food buyer?
DAP, on risk. The seller owns the consignment until it arrives, so a reefer failure in transit is the seller’s loss rather than an argument. The price will reflect that, and it should. A buyer with strong logistics and good insurance may still prefer FCA for the control and the freight transparency.
Why is CPT considered risky for frozen goods?
Because cost and risk separate. The seller pays for the carriage but the buyer’s risk starts when the goods are handed to the first carrier, which is usually at the seller’s premises. If the load arrives warm, the buyer bears the loss and has to pursue a carrier it never appointed, under CMR liability limits based on weight rather than value.
Does FCA mean the seller loads the truck?
Under FCA, where the named place is the seller’s premises, delivery happens when the goods are loaded onto the buyer’s collecting vehicle, so yes, loading is the seller’s task there. Where the named place is somewhere else, delivery happens when the goods are placed at the disposal of the buyer’s carrier ready for unloading. The distinction matters, so the named place should say which case applies.
Who does the export declaration?
The seller, under all three rules. Import clearance is the buyer’s, under all three. That split is why a buyer new to third-country sourcing needs an EORI number and a customs representative in place before the first load, not after it. Who files the customs declaration covers the responsibility.
Can we agree variations to a rule?
You can, and parties do, but every variation weakens the shorthand the rule exists to provide. If you write “DAP unloaded” or “FCA seller arranges transport at buyer’s cost”, spell out in the contract exactly what is meant, because the rule as published no longer describes what you agreed. The safer route is to pick the rule that already says what you want. The Incoterms glossary entry maps the full set.