Incoterms
Quick answer
Standardised international rules (ICC) defining who pays for transport, risk and customs in a commercial transaction.
Key takeaways
- EXW - buyer collects at the seller's gate
- FCA / FOB - handover to the carrier
- CIF - cost, insurance, freight to port
- DAP / DDP - delivered at destination, duties included under DDP
What Incoterms are
Incoterms (International Commercial Terms) are rules published by the International Chamber of Commerce that set, in a sale, who bears transport cost and risk, insurance and customs formalities, and up to which point of the route.
Why it matters to the board
The chosen Incoterm determines the real landed cost of goods and risk exposure. A wrong choice (e.g. DDP without customs capacity) creates surprise costs and delays.
Common examples
- EXW - buyer collects at the seller's gate
- FCA / FOB - handover to the carrier
- CIF - cost, insurance, freight to port
- DAP / DDP - delivered at destination, duties included under DDP
How CRMconnect helps
CRMconnect keeps the Incoterm on each order and uses it in landed-cost calculation and transport documents, so costs and responsibilities are clear across the whole flow.
Real-world example
An importer worked on DDP without pricing in customs duties and lost margin on every shipment. Switching to FCA and computing landed cost correctly in CRMconnect restored target margin.
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Frequently asked
Are Incoterms legally binding?+
They aren't law but standard rules adopted contractually. Once included in a contract, they become binding between the parties.
Which Incoterm is best?+
None universally. It depends on your logistics and customs capacity and where you want to transfer risk and cost.
Where CRMconnect fits
Related terms
CMR Consignment Note
The international road transport document proving the contract between consignor, carrier and consignee.
LogisticsBill of Lading (B/L)
The sea transport document proving receipt of goods, the transport contract and title to the goods.
FinanceLanded Cost
The total real cost of a product up to the warehouse: purchase price + freight + duties + insurance + handling.
LogisticsHS Code (Tariff Code)
The international customs classification code for goods, determining duties and import/export restrictions.