Key Shipping Terms in International Trade
For businesses engaged in cross-border trade, the correct application of shipping terms is fundamental to managing contractual risk, controlling landed costs, and maintaining operational transparency.
Incoterms 2020 Rules
Governing Body Since 1936
Current Edition in Force
When properly applied, Incoterms reduce contractual disputes, improve transparency, and support more predictable cost management across international supply chains. They define:
Who arranges and pays for transportation
Where risk transfers from seller to buyer
Responsibility for export and import customs clearance
Allocation of duties, taxes, and insurance costs
The seller makes goods available at their premises. The buyer assumes full responsibility for the shipment from that point — including loading, export clearance, and all onward transport costs.
Applicable to all modes of transport.
The seller delivers and loads the goods onto the named vessel at the port of shipment. Risk transfers to the buyer once goods are on board.
Sea and inland waterway transport only.
The seller pays freight costs to the destination port; however, risk transfers to the buyer once the goods are on board at the origin port.
Sea and inland waterway transport only.
The seller arranges and bears the cost of transportation to a named destination. The buyer remains responsible for import duties and final unloading.
Applicable to all modes of transport.
DDP places maximum contractual responsibility on the seller, who manages transportation, export and import clearance, duties, and delivery to the named destination.
Applicable to all modes of transport.
The seller delivers the goods to a named carrier or nominated party at a specified location. Risk transfers at that point; the buyer manages onward transport.
Applicable to all modes of transport.
Incorrect application of Incoterms can result in unexpected landed costs, operational delays, or contractual disputes. Our advisors help you select, document, and apply the right term for each trade relationship.
Our team provides structured consultation to help you select, apply, and document the correct Incoterms for your trade agreements and supply chain requirements.
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