Incoterms® Who’s Responsible for What?
“Wait… I thought my supplier was handling that.” Sound familiar?
Incoterms® (International Commercial Terms) define who’s responsible for what in a trade transaction – costs, risk, transport, insurance, even customs clearance.
Here’s a quick cheat sheet for some of the most common terms:
EXW – Ex Works The buyer does everything. You collect the goods at the seller’s premises and handle it from there – export, transport, insurance, the lot.
Watch out: This can be risky for inexperienced importers.
FOB – Free On Board The seller gets the goods onto the ship at the named port. From there, it’s the buyer’s responsibility.✅ Often used in sea freight.
DDP – Delivered Duty Paid The seller handles everything – delivery, duties, customs clearance.
✅ Sounds easy? Maybe. But it gives the seller control over the process and costs.
⚠️ The goal of Incoterms is to avoid misunderstandings, clarify roles, and streamline international trade contracts and agreements.
Pro tip from one of our teachers and International Customs expert Bertrand Rager: Never assume – get the Incoterm agreed in writing and know exactly where your responsibilities start.
