Shipping Incoterms Blog

1.Why Incoterms Matter for B2B Buyers In international trade, clarity is everything. When you place a bulk order with a manufacturer overseas, the last thing you want is confusion about who is responsible for shipping, insurance, customs clearance, or delivery costs. That’s where Incoterms (International Commercial Terms) come in. Published by the International Chamber of Commerce (ICC), Incoterms provide a universal set of trade rules that define the responsibilities between buyers and sellers. They are widely used in contracts, invoices, and negotiations to avoid disputes. For B2B buyers, understanding Incoterms 2020 is not just a matter of compliance—it’s about managing risks, controlling costs, and securing smoother supply chains. Whether you are sourcing from China, Europe, or other markets, the right Incoterm can make or break your deal. This guide will help you understand what Incoterms are, the main categories of responsibility, and how to choose the best terms for your

Navigating the complex labyrinth of international shipping requires a common language, a set of rules that clearly delineates the responsibilities, costs, and risks for both buyers and sellers. This is where Incoterms®—International Commercial Terms—come into play. Established by the International Chamber of Commerce (ICC), these three-letter codes are the cornerstone of global trade contracts. Among these terms, one stands out for placing the maximum obligation on the seller: DDP, or Delivered Duty Paid. For an importer, it can seem like the ultimate convenience. For an exporter, it represents a significant undertaking fraught with potential pitfalls. Understanding DDP is crucial for any business looking streamline their supply chain for their customers or, conversely, to avoid taking on unforeseen liabilities. This in-depth guide will dissect the DDP agreement, exploring its meaning, the intricate division of responsibilities, its pros and cons, ideal use cases, and answers to the most frequently asked questions. 1. What does

1. What does EX Works (EXW) Mean in shipping terms? EX Works (EXW) is an Incoterm® rule, meaning a standardized international trade term published by the International Chamber of Commerce (ICC). It signifies that the seller makes the goods available at their premises (e.g., factory, warehouse, or place of business). The buyer is responsible for all costs and risks involved in collecting the goods from that location and transporting them to the final destination. Essentially, the seller’s responsibility ends at their own dock. 2. What are the Buyers and Sellers Responsibilities with EXW Agreements? Seller:  – Make the goods available at the named place (their premises) at the agreed-upon time. – Package and label the goods appropriately for pickup. – Provide necessary documentation (e.g., commercial invoice, packing list) to assist the buyer in exporting. – Not responsible for loading the goods onto the buyer’s vehicle, nor for clearing the goods

1. What does FCA Mean in shipping terms? FCA stands for “Free Carrier” in shipping terms.It is one of the 11 Incoterms 2020 rules set by the International Chamber of Commerce (ICC).The core idea of FCA: The seller delivers the goods to the carrier nominated by the buyer.The seller must complete export customs clearance before delivery.Once the goods are handed over to the nominated carrier, the risk of loss or damage to the goods transfers from the seller to the buyer.FCA applies to all modes of transport, including multi-modal transport (e.g., road + sea, air + rail). 2. What are the Buyers and Sellers Responsibilities with FCA Agreements? Seller’s Responsibilities Buyer’s Responsibilities 3. Advantages and Disadvantages for the Buyer Advantages Disadvantages 4. When to Use an FCA Agreement? 5. FCA Agreements for China Importing: are they a good idea? Why FCA can be a good idea for China importing Potential

1. What Does FAS Mean in Incoterms? FAS (Free Alongside Ship) is a trade term under the International Chamber of Commerce (ICC) Incoterms® rules, applicable exclusively to sea and inland waterway transport. Its core definition states that the seller delivers goods alongside the designated vessel at the port of shipment (e.g., on a quay or barge), at which point risks and costs transfer to the buyer. Originating in the age of sailing ships, FAS was traditionally used for bulk cargo (e.g., grains, minerals) or heavy machinery, as these goods could be delivered directly at the quayside without containerization. The key distinction between FAS and FOB (Free on Board) lies in loading responsibilities: under FAS, the seller is not required to load goods onto the vessel, whereas FOB obligates the seller to handle loading. 2. What Are the Seller’s Responsibilities? Under Incoterms® 2020, the seller’s primary obligations include: Delivery: Transport goods

Navigating international shipping can feel complicated. There are many rules and terms. One of the most important terms to know is CPT. CPT can be a great option for buyers and sellers. It balances cost and control. But what does it really mean? And when should you use it? This guide will explain CPT in simple English. We will break down the responsibilities, advantages, and disadvantages. Let’s make CPT easy to understand. 1. What does CPT Mean in Shipping Terms? CPT stands for “Carriage Paid To.” It is an Incoterm. Incoterms are international rules for shipping goods. They define who does what, who pays for what, and where risk transfers from seller to buyer. Here is the simple meaning of CPT: Key Takeaway: The seller pays for the main carriage, but the risk transfers to the buyer early in the journey. 2. What are the Seller’s Responsibilities? Under CPT, the seller has

Navigating the complex world of international shipping requires a common language. Misunderstandations over who pays for what, who is responsible for the goods at which point, and who handles customs can lead to costly delays, disputes, and broken business relationships. This is where Incoterms come in. The International Commercial Terms, or Incoterms, are a set of 11 globally recognized rules published by the International Chamber of Commerce (ICC). They define the tasks, costs, and risks involved in the delivery of goods from the seller to the buyer. Among these rules, Delivered at Place (DAP) has become one of the most widely used in modern trade. Its flexibility suits various shipping modes and provides a clear handover point. But what does DAP truly mean for your business? This definitive guide will break down everything you need to know about DAP Incoterms. 1. What does DAP Mean in Shipping Terms? Delivered at

In international trade and logistics, trade terms are the core principles defining the responsibilities, risks, and costs of buyers and sellers. Delivered at Place (DPU), a key term in the Incoterms 2020 system, has a direct impact on transaction efficiency and risk management. This article will comprehensively analyze DPU’s core meaning, division of responsibilities, advantages and disadvantages, applicable scenarios, and frequently asked questions. 1、What does DPU mean in shipping terms? DPU, short for “Delivered at Place Unloaded,” is a new trade term introduced by the International Chamber of Commerce (ICC) in Incoterms 2020, replacing DAT (Delivered at Terminal) in the 2010 edition. Its core definition can be broken down into three dimensions: Core Content DPU, centered on the “point of unloading at designated destination,” means the seller’s delivery obligation is fulfilled only after the goods have been transported to the buyer’s designated destination (e.g., warehouse, factory, container yard, etc.) and

International trade needs clear rules. Misunderstandings cause problems. They lead to delays. They cost money. Incoterms solve this problem. CIP is one of these rules. It stands for “Carriage and Insurance Paid To”. It is a common term for all types of shipments. This guide will explain CIP in simple terms. 1. What does CIP stand for in Shipping Terms? CIP means “Carriage and Insurance Paid To”. The seller delivers the goods to a carrier. The seller chooses this carrier. The seller pays for transportation to a named destination. This destination is agreed with the buyer. The seller also buys insurance for the journey. The Key Concept: Risk vs. Cost This is very important. In CIP, risk and cost transfer at different times. Cost: The seller pays for the main transport and insurance to the destination. Risk: The risk transfers to the buyer much earlier. It happens when the seller

1. What Does FOB Mean in Shipping Terms? FOB stands for Free on Board. It is one of the oldest and most widely used Incoterms in global trade. Buyers and sellers choose FOB when they want a clear division of responsibilities at the port of shipment. Under FOB, the seller delivers the goods onto the vessel that has been nominated by the buyer. The loading point is critical. Once the goods are safely placed on board, the risk of loss or damage immediately shifts from the seller to the buyer. From this moment, the buyer takes full responsibility for the cargo. Key points to remember: FOB is suitable only for sea freight and inland waterway transport. It cannot be used for air shipments, courier parcels, or multimodal transport. In practice, FOB is especially common in China trade, because it gives overseas buyers more control over shipping arrangements and helps avoid

International trade relies on clear agreements. Incoterms define who pays for freight, who handles insurance, and when risk transfers. Among them, CPT and CFR are often compared. Buyers and sellers need to understand these terms to avoid costly mistakes. This guide explains CPT in detail while comparing it with CFR Incoterms and CIF. 1.What does CFR stand for in Shipping Terms? 1.1  Simple definition of CFR Incoterms CFR stands for Cost and Freight. It is one of the 11 Incoterms published by the International Chamber of Commerce (ICC). Under CFR, the seller pays for the cost of transporting goods to the port of destination. The term is widely used in bulk cargo shipments such as raw materials, chemicals, and agricultural goods. Key points: Why it matters: Example: A supplier in China sells 500 tons of steel to a buyer in Brazil. Under CFR terms, the supplier covers all freight charges

1. What does CIF stand for in Shipping Terms? CIF means Cost, Insurance, and Freight. It is one of the official Incoterms used in global trade. Under CIF, the seller pays the cost of the goods, the marine insurance, and the freight charges needed to bring the goods to the buyer’s destination port. However, even though the seller covers these expenses, the risk of loss or damage passes to the buyer once the goods are loaded on board the vessel. So, the seller pays for cost, freight, and insurance, but the buyer bears the risk during the main carriage. CIF is only valid for sea and inland waterway transport. It is not used for air, road, or rail shipments. 2. What are the Buyers and Sellers Responsibilities with CIF Agreements? Under CIF, responsibilities are divided clearly. Seller’s Responsibilities: Buyer’s Responsibilities: 3.Advantages and Disadvantages for the Buyer Advantages of CIF for