What Are Incoterms?
ncoterms (International Commercial Terms) are a set of standardized rules published by the International Chamber of Commerce (ICC) to define the responsibilities of buyers and sellers in international trade. They clarify who is responsible for transportation, insurance, customs clearance, and other logistics operations.
Key Delivery Terms Explained:
DDP (Delivered Duty Paid):
The seller handles everything — shipping, insurance, customs duties — until the goods reach the buyer’s location, fully cleared.
EXW (Ex Works):
The buyer bears full responsibility from the seller’s door onwards — including all transportation, insurance, and import customs clearance.
FOB (Free On Board):
The seller is responsible until the goods are loaded on the shipping vessel. From that point, the buyer takes over.
Impact on Technical Product Imports/Exports:
In high-value technical goods, mismanagement of delivery terms can lead to unexpected costs, customs delays, and operational disruptions. Choosing the correct incoterm ensures transparency in responsibilities and cost control.
Which Term to Use and When?
DDP: Best when the seller offers a turnkey delivery service or when the buyer is unfamiliar with import procedures.
EXW: Suitable when the buyer wants full control over logistics.
FOB: Ideal for sea shipments where buyer has a trusted forwarder.
Real-World Scenarios:
We share case studies from different sectors — like automation components, industrial machinery, and electronics — where choosing the right delivery term saved thousands in unexpected fees.