Table of Contents
What Are Incoterms?
Incoterms (International Commercial Terms) define who pays for what, who handles customs, and where risk transfers in international trade. Published by ICC, the current version is Incoterms 2020 with 11 terms.
Comparison Table
| Term | Seller Does | Buyer Does | Best For |
|---|---|---|---|
| EXW | Goods at factory | Everything else | Buyers with own logistics |
| FOB | Factory + export customs | Freight + import + delivery | Experienced importers |
| CIF | Freight + insurance to port | Import customs + delivery | Sea freight buyers |
| DAP | Everything except duty | Import duty + VAT | Buyers with import license |
| DDP | Everything including duty | Nothing (just receive) | Hassle-free importing |
Risk Transfer Points
| Term | Risk Transfers At | Cost Bearer Changes At |
|---|---|---|
| EXW | Factory door | Factory door |
| FOB | On board vessel | Port of loading |
| CIF | On board vessel | Port of destination (but seller pays freight) |
| DAP | Destination address | Destination address (minus duty) |
| DDP | Destination address | Never β seller bears all costs |
Which Should You Choose?
- New importer: DDP β simplest, one price, no surprises
- Experienced: FOB β more control, potentially cheaper
- Sea freight: CIF β common for ocean shipments
- Have import license: DAP β save on duty with own broker
- ChenXin Cargo recommends: DDP for most customers β we handle everything
Q: What does DDP mean?
A: Delivered Duty Paid β seller handles everything including transport, customs, duty and VAT to your door.
Q: EXW vs FOB?
A: EXW: buyer picks up at factory. FOB: seller delivers to port. FOB is more common for experienced importers.
Q: Which is cheapest?
A: EXW looks cheapest but you pay for everything. DDP looks most expensive but has no hidden costs. Compare total landed cost.
Q: ChenXin Cargo recommends which?
A: DDP for most customers β one price, zero hassle. We handle pickup, freight, customs, duty, and delivery.
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