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11/09/2023
Incoterms for exporters: Essential tips to grow your business globally.
Incoterms (International Terms of Trade) are the logistics contract that will measure the liability of each party (importer and buyer) within the import process.
In other words, to what extent each party must pay and who is liable in the event of damage or costs occurring during the import.
Sometimes we are faced with the uncertainty of the customer as to which term he needs in his productions. The solution to this choice will depend on the logistical capabilities that he has at that particular moment.
Among the most commonly used incoterms for imports from Asia are the following.
- 1. FOB, Free On Board
- 2. EXW, Ex Works
FOB is the most common incoterm for imports from Asia. It indicates that the seller is responsible for the delivery of the goods on board the ship at the designated port of shipment. From this point, the buyer assumes the responsibility and costs of transport, insurance and customs formalities. Usually used in maritime transport.
- 3. CIF, Cost, Insurance and Freight
EXW states that the seller has the minimum liability. The seller makes the goods available to the buyer at his own premises or designated location. The buyer bears the freight and the cost of transport, insurance and customs clearance from the place of origin to the agreed final destination.
CIF indicates that the seller is responsible for the goods at the named port of destination, covering the cost of transport and insurance to that point. However, once the goods are loaded onto the ship, the risk and any additional costs are borne by the buyer. The term CIF is commonly used in maritime transport.
- 4. DDP, Delivered Duty Paid
DDP states that the seller is responsible for delivering the goods to the agreed place of destination, assuming all risks and associated costs, including customs duties and taxes. The seller is responsible for bringing the goods to the buyer, ready to be unloaded and used.
Therefore, you should always choose the Incoterm that offers you the best guarantee when you receive the goods at the final destination.
If you have any doubts about this, you can contact the Pinexports operations team to find out what we can offer you.