Where does risk pass?

Pick an Incoterms® 2020 rule and see where the risk passes from seller to buyer, how far the seller pays for carriage, who clears export and import, and who must insure. Four of the eleven rules put those two lines in different places.

Any mode of transport

Sea and inland waterway only

The goods travel in a container

Incoterms® 2020. The rules decide risk and cost, not who owns the goods or who is physically holding them. A general explanation, not legal advice; the ICC text and your contract govern.

Reading it

Risk, cost, title and custody are four different lines

Risk is who bears loss or damage from a given point. The rule decides it.
Cost is who pays for each leg. The rule decides it too, and under CPT, CIP, CFR and CIF it runs past the point where risk has already passed.
Title, meaning who owns the goods, is not decided by any Incoterms rule. The contract of sale and the law governing it decide it.
Custody, meaning who is physically holding the goods, is not mentioned by the rules at all. It is a chain of handovers, and a claim turns on proving it.

Questions

Incoterms risk questions

Under CIF, when does risk pass to the buyer?

When the goods are on board the vessel at the port of shipment, even though the seller pays the freight to the port of destination and must insure the goods.

What insurance does CIP require compared with CIF?

Since the 2020 edition, CIP requires cover complying with Institute Cargo Clauses (A) or similar. CIF keeps Institute Cargo Clauses (C) as the default minimum.

What is the difference between DAP and DPU?

Under DAP the seller delivers on the arriving vehicle, ready for unloading, and the buyer unloads. Under DPU the seller unloads, and risk passes once the goods are unloaded. DPU replaced DAT in 2020.

Can FOB be used for containers?

It is used, but it fits badly: a container is handed over at the terminal, often days before it is loaded on board, while FOB places delivery on board. ICC guidance points to FCA for containerized goods.

Do Incoterms decide who owns the goods?

No. The rules do not deal with the transfer of title. The contract of sale and the law that governs it do.

Sources

Where these facts come from

ICC, Incoterms® 2020: the 2020 changes, including DAT renamed DPU, CIP cover at Institute Cargo Clauses (A), and who unloads under DAP and DPU.
International Trade Administration, Know Your Incoterms: the seven rules for any mode and the four for sea and inland waterway.
Geldards, A summary of the Incoterms 2020: each rule's delivery point and where risk passes.

Incoterms® is a trademark of the International Chamber of Commerce. Read the ICC text for the full obligations.

Cargovate

Evidence for the moment the rule names

Every rule turns on an event: handed to the carrier, on board, arrived, unloaded. Cargovate records those events as checkpoints on one shipment record across carriers, so the moment your contract depends on is something you can produce. See chain of custody for forwarders.

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