The Ultimate Guide to International Shipping Trade Terms (Incoterms)
Understand Incoterms like EXW, FOB, CIF, DDP & more to avoid confusion, reduce costs, and streamline global freight shipments.
What Are Incoterms?
Incoterms (International Commercial Terms) are globally recognized trade terms defined by the International Chamber of Commerce (ICC). They clarify who is responsible for transportation, insurance, duties, and risks at different stages of international trade.
Whether you’re an importer oder exporter, knowing the right Incoterm for your shipment helps prevent delays, legal disputes, and hidden fees.
Warum sind Incoterms wichtig?
- Define Wer bezahlt? for freight, insurance, customs, and port charges
- Establish the point of risk transfer from seller to buyer
- Determine who arranges transportation and documentation
- Avoid costly misunderstandings in international contracts
Common Incoterms Explained (2020 Edition)
| Begriff | Full Form | Seller Responsibility | Buyer Responsibility | Übliche Verwendung |
|---|---|---|---|---|
| EXW | ab Werk | Minimum (goods at seller’s premises) | All transport & clearance | Domestic pickups, buyer has freight control |
| FOB | Frei an Bord | Until goods are loaded on vessel | Freight & import clearance | Sea freight, commonly used with China exports |
| CFR | Kosten und Fracht | Export + main carriage | Insurance + import costs | Bulk shipments where buyer arranges insurance |
| CIF | Cost, Insurance, and Freight | Export, sea freight, insurance | Import clearance & duties | Buyer wants seller to arrange marine insurance |
| DAP | Delivered at Place | All transport to named place | Import duties & clearance | E-commerce, B2B deliveries |
| DDP | Lieferung verzollt | All costs including duties & taxes | Receive goods | Turnkey delivery, ideal for buyer convenience |
When to Use Each Term
Verwendung EXW wann:
Buyer has strong logistics knowledge or their own freight forwarder.
Shipment starts from seller’s Lager or factory.
Verwendung FOB oder CFR/CIF wann:
You’re shipping via ocean freight.
Seller can bring goods to port but buyer handles destination logistics.
Verwendung DAP/DDP wann:
You want seamless Lieferung von Tür zu Tür.
Buyer wants minimal responsibility and no customs handling.
Key Differences: DDP vs DDU
| Funktion | DDP (Delivered Duty Paid) | DDU (Delivered Duty Unpaid) |
|---|---|---|
| Taxes & Duties | Paid by seller | Paid by buyer |
| Buyer Involvement | Minimal | Must handle customs clearance |
| Delivery | Hassle-free | Delays possible |
| Ideal für | Small businesses, first-time importers | Experienced buyers with local brokers |
Best Practices for Using Incoterms
Immer include Incoterms in the sales contract with place name (e.g., FOB Shanghai).
Ensure your freight forwarder understands the Incoterm agreed upon.
Sellers: Avoid choosing DDP if unfamiliar with buyer country’s customs rules.
Buyers: Calculate landed cost including duties, taxes, and handling fees.
Incoterms Visual Comparison Chart
| Funktion | FOB | CIF | DDP |
|---|---|---|---|
| Frachtkosten getragen von | Käufer | Verkäufer | Verkäufer |
| Versicherung bezahlt von | Käufer | Verkäufer | Verkäufer |
| Import Duties | Käufer | Käufer | Verkäufer |
| Delivery Location | Port in Buyer’s country | Port in Buyer’s country | Final destination (door) |
| Risk Transfer | At origin port | At origin port | At destination (door) |
With decades of experience in global freight forwarding,CHINA BRF LOGISTICS helps exporters and importers navigate Incoterms, arrange smooth deliveries, and reduce cross-border trade risks.
Häufig gestellte Fragen (FAQs)
Q1: Which Incoterm is best for sea freight from China?
FOB and CIF are the most commonly used Incoterms for ocean freight shipments from China.
Q2: What’s the safest term for a new importer?
DDP is the safest as the seller takes care of everything, including duties and taxes.
Q3: Are Incoterms legally binding?
Incoterms are not laws but become legally binding once included in a signed contract.