Incoterms 2020: Which to Choose for Your Import Operation
What are Incoterms?
International Commercial Terms (Incoterms) clearly define the responsibilities, risks, and costs between the buyer and the seller in an international transaction.
Most commonly used Incoterms
- FOB (Free On Board): The seller assumes costs until the cargo is on board the vessel. It's ideal if you have a reliable freight forwarder.
- CIF (Cost, Insurance & Freight): The seller covers freight and insurance to the destination port. It may seem easier, but sometimes hides high local costs.
- EXW (Ex Works): The buyer assumes all costs from the seller's warehouse. Requires excellent logistical coordination.
Choosing the right Incoterm can save you thousands of dollars in unforeseen terminal and handling costs.