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)

Let China BRFlogistics Help You Choose the Right Incoterm

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.

The Ultimate Guide to International Shipping Trade Terms (Incoterms)

Understanding Incoterms is essential for global trade. BRF Logistics helps importers and exporters choose the right shipping terms, manage transportation responsibilities, and reduce risks in international shipments.

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What Are Incoterms?

Incoterms (International Commercial Terms) are globally recognized trade rules published by the International Chamber of Commerce (ICC). They define the responsibilities between buyers and sellers during international transactions, including transportation costs, risk transfer, insurance, customs clearance, and delivery obligations.

Choosing the correct Incoterm can significantly impact your total logistics cost and supply chain efficiency. BRF Logistics provides professional guidance for selecting suitable shipping terms including EXW, FOB, CIF, CFR, DAP, DDP, and more.

11 Incoterms Rules Explained

EXW – Ex Works

The seller makes the goods available at their factory or warehouse. The buyer handles pickup, export clearance, transportation, and all risks after collection.

Am besten geeignet für: Experienced buyers with their own logistics network.

FCA – Free Carrier

The seller delivers goods to a carrier or location specified by the buyer. Export clearance is normally completed by the seller.

Am besten geeignet für: Container shipping and multimodal transport.

FOB – Free On Board

The seller delivers cargo onboard the vessel at the export port. The buyer manages ocean freight, insurance, and import procedures.

Am besten geeignet für: Ocean freight shipments.

CFR – Cost and Freight

The seller pays ocean freight to the destination port, while the buyer takes responsibility for insurance and import clearance.

Am besten geeignet für: Sea freight without seller-provided insurance.

CIF – Cost Insurance and Freight

The seller pays freight and minimum insurance coverage until the destination port.

Am besten geeignet für: Buyers requiring seller-arranged ocean transportation.

DAP – Delivered At Place

The seller delivers goods to the agreed destination, but the buyer handles import clearance and duties.

Am besten geeignet für: Door delivery without prepaid duties.

DDP – Delivered Duty Paid

The seller manages almost the entire logistics process including transportation, customs clearance, duties, and final delivery.

Am besten geeignet für: E-commerce, Amazon FBA, and buyers needing simple solutions.

Buyer vs Seller Responsibilities Under Incoterms

Responsibility	Verkäufer	Käufer
Ausfuhrzollabfertigung	Usually Seller	Depends on Incoterm
International Freight	Depends on Agreement	Depends on Agreement
Import Customs Clearance	Only DDP	Usually Buyer
Import Duties & Taxes	DDP Seller	Most Terms Buyer
Endauslieferung	DAP/DDP Seller	Other Terms Buyer

How BRF Logistics Helps With Incoterms

Selecting the wrong Incoterm can create unexpected costs, customs issues, and delivery delays. BRF Logistics provides professional international shipping solutions based on your trade requirements.