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 หรือ exporter, knowing the right Incoterm for your shipment helps prevent delays, legal disputes, and hidden fees.

Why Are Incoterms Important?

Define who pays 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)

คำศัพท์	Full Form	Seller Responsibility	Buyer Responsibility	Common Use
EXW	Ex Works	Minimum (goods at seller’s premises)	All transport & clearance	Domestic pickups, buyer has freight control
FOB	Free On Board	Until goods are loaded on vessel	Freight & import clearance	Sea freight, commonly used with China exports
CFR	ค่าขนส่งและค่าสินค้า	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	Delivered Duty Paid	All costs including duties & taxes	Receive goods	Turnkey delivery, ideal for buyer convenience

When to Use Each Term

ใช้ EXW when:

Buyer has strong logistics knowledge or their own freight forwarder.
Shipment starts from seller’s คลังสินค้า or factory.

ใช้ FOB หรือ CFR/CIF when:

You’re shipping via ocean freight.
Seller can bring goods to port but buyer handles destination logistics.

ใช้ DAP/DDP when:

You want seamless door-to-door delivery.
Buyer wants minimal responsibility and no customs handling.

Key Differences: DDP vs DDU

Feature	DDP (ส่งถึงที่หมายพร้อมชำระภาษีนำเข้า)	DDU (ส่งถึงที่หมาย แต่ยังไม่ชำระภาษีนำเข้า)
Taxes & Duties	Paid by seller	Paid by buyer
Buyer Involvement	Minimal	Must handle customs clearance
Delivery	Hassle-free	Delays possible
Ideal For	Small businesses, first-time importers	Experienced buyers with local brokers

Best Practices for Using Incoterms

Always 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

Feature	FOB	CIF	DDP
ค่าขนส่งจ่ายโดย	ผู้ซื้อ	ผู้ขาย	ผู้ขาย
ผู้จ่ายค่าประกัน	ผู้ซื้อ	ผู้ขาย	ผู้ขาย
Import Duties	ผู้ซื้อ	ผู้ซื้อ	ผู้ขาย
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.

Best for: 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.

Best for: 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.

Best for: 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.

Best for: Sea freight without seller-provided insurance.

CIF – Cost Insurance and Freight

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

Best for: 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.

Best for: 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.

Best for: E-commerce, Amazon FBA, and buyers needing simple solutions.

Buyer vs Seller Responsibilities Under Incoterms

Responsibility	ผู้ขาย	ผู้ซื้อ
การผ่านพิธีการศุลกากรสำหรับการส่งออก	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
การส่งมอบครั้งสุดท้าย	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.