Your What are the four most used Incoterms?
Here are four of the most commonly used Incoterms: EXW, FOB, CIF, and DDP. These
terms are favored due to their clear guidelines and suitability for different modes of
transport and shipping scenarios.
EXW – Ex Works
Why it’s used: EXW is popular because it places minimal responsibility on the seller. Thebuyer is responsible for all costs and risks from the seller’s premises onward. This term
is straightforward for sellers, making it a common choice for initial stages of shipping.
FOB – Free On Board
Why it’s used: FOB is widely used in sea freight shipping. The seller is responsible for thegoods until they are loaded on board the vessel, after which the risk transfers to the
buyer. This provides a clear point of transition and is particularly useful for bulk
shipments.
CIF – Cost, Insurance and Freight
Why it’s used: CIF is favored in sea freight as it includes the cost of the goods,
insurance, and seafreight to the named port of destination. The seller takes on the
responsibility for the costs and risks until the goods reach the destination port,
providing buyers with some risk mitigation during transit.
DDP – Delivered Duty Paid
Why it’s used: DDP is popular because it places maximum responsibility on the seller,
who covers all shipping costs, risks, customs clearance, import duties & taxes in the
country of destination. This term is convenient for buyers who prefer a hassle-free
delivery process, as the seller manages all logistics and associated costs.
These Incoterms are frequently used because they offer clear and well-defined
responsibilities and costs between buyers and sellers, making them suitable for various
shipping and trading scenarios.
Reference from
Ben Thompson.//2024.//Incoterms® 2020 Explained – The Complete Guide
.//Available: https://incodocs.com/blog/incoterms-2020-explained-the-completeguide/./10/07,2024