What are Incoterms and how do they affect my shipments?
Incoterms are standardized trade terms defining buyer and seller responsibilities for transport, export and import clearance, insurance, and the point where risk transfers. Examples:
- EXW: Buyer handles all transport and clearance from the seller’s door.
- FOB: Seller delivers goods onboard vessel, buyer handles ocean freight and beyond.
- DDP: Seller handles transport and import clearance to buyer’s door.
EXW or FOB from my supplier?
EXW: you control costs but must handle export formalities and pickup at the seller’s door. FOB: seller clears export and loads on the vessel or at named port; you control main carriage. FOB is often easier for small importers.
What does DDP mean?
Delivered Duty Paid: the seller handles transport, import clearance, and pays duties/taxes to deliver to your door. It is convenient for buyers but sellers must be able to act in the destination country.