Introduction
Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers in international trade. Choosing the right Incoterm can impact shipping costs, risks, and delivery responsibilities.
Key Incoterms & What They Mean
1. EXW (Ex Works) – Buyer takes full responsibility from the seller’s location.
🚚 Best for businesses that have their own logistics network.
2. FOB (Free on Board) – Seller covers costs until the goods are on board the ship.
🚢 Common in sea freight transactions.
3. CIF (Cost, Insurance, and Freight) – Seller covers shipping and insurance until the destination port.
💰 Preferred by businesses that want cost predictability.
4. DDP (Delivered Duty Paid) – Seller covers all costs, including import duties.
📦 Ideal for buyers who want hassle-free delivery.
How to Choose the Right Incoterm for Your Business
💡 Consider:
✅ Cost-sharing preferences
✅ Risk tolerance
✅ International trade experience
Conclusion
Understanding Incoterms helps businesses avoid disputes, reduce risks, and manage shipping costs effectively.
