How to Choose the Best Incoterm for Your Exports or Imports

When it comes to international trade, one of the most important — and often least understood — aspects is choosing the right Incoterm. This term defines the responsibilities between buyer and seller throughout the logistics process: who pays what, who assumes the risks, and how far each party’s responsibility goes.

Making the right Incoterm choice not only avoids misunderstandings but can significantly impact costs, logistical efficiency, and the overall success of the operation.

🔍 What Are Incoterms?

Incoterms (International Commercial Terms) are a set of rules created by the International Chamber of Commerce (ICC) that standardize delivery conditions in international trade. The most recent version is Incoterms 2020, which includes 11 different terms, divided into two main groups:

Multimodal Terms

(valid for any mode of transport): EXW, FCA, CPT, CIP, DAP, DPU, DDP.

Maritime Terms

(only for sea or inland waterway transport): FAS, FOB, CFR, CIF.

✅ How to Choose the Right Incoterm?

Here are some practical criteria to help you make the right decision:

1. Who has more logistical experience?

If you, as the exporter, have more control and knowledge of logistics, you might want to take on more responsibility (e.g., CIF or DDP).
If the buyer has a strong local logistics network, you can let them handle more (EXW or FCA).

2. How complex is the customs process in the destination country?

If the destination has complicated customs procedures, it may be better for the buyer to handle them (e.g., using DAP instead of DDP).

3. What is the main mode of transport?

For maritime shipments, consider FOB, CFR, or CIF.
For air or land shipments, better to use FCA, CPT, or CIP.

4. Who will arrange and pay for transport?

If you want full control until final delivery, choose DDP or CIP.
If the buyer will handle transport, consider EXW or FCA.

📦 Common Examples

Scenario	Recommended Incoterm
New exporter with little experience	EXW or FCA
Exporter offering full-service delivery	DAP or DDP
Maritime trade with Latin America	FOB or CIF
B2B sales to large distributors	CFR or CPT

🛠️ Final Tip

Before setting an Incoterm in a contract, consult your freight forwarder or logistics advisor. A mistake here can lead to extra costs, delays, or even legal disputes.

If you have any doubts about this type of service, you can always contact us and we will help you as much as possible.

Somos especialistas en transporte internacional por mar, aire y tierra, gestionamos cada etapa del proceso con rigor, compromiso y cercanía. Desde la documentación aduanera hasta la entrega final, nos encargamos de que todo fluya sin complicaciones.

We are specialists in international transport by sea, air and land, managing each stage of the process with rigour, commitment and proximity. From customs documentation to final delivery, we make sure everything runs smoothly.

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