INCOTERMS

EXW – Ex Works (named place of delivery)

EXW is often used when making an initial quotation to sell goods without any costs included. It means that the seller makes the goods available at their premises or another named place (works, factory, warehouse, etc.). Thus, the seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export.

FCA – Free Carrier (named place of delivery)

FCA can have two different meanings, each with varying levels of risk and cost for the buyer and seller. FCA (a) is used when the seller delivers the goods, cleared for export, at a named place which is their premises. FCA (b) is used when the seller provides the goods, removed for export, at a designated location that is not their premises. In both instances, the goods can be delivered to a carrier nominated by the buyer or another party designated by the buyer.

CPT – Carriage Paid To (named place of destination)

Under CPT, the seller pays for the carriage of goods up to the designated destination area. 

CIP – Carriage and Insurance Paid to (named place of destination)

Similar to CPT, with the exception that the seller is required to obtain minimum insurance for the goods while in transit. 

DAP – Delivered at Place (named place of destination)

The seller is deemed to have delivered when the goods are placed at the buyer's disposal on the arriving means of transport and ready for unloading at the named place of destination. Under DAP terms, the seller needs to manage all risks involved in bringing the goods in.

DPU – Delivered at Place Unloaded (named place of destination)

This Incoterm requires that the seller delivers the goods, unloaded, at the designated location. The seller covers all the costs of transport (export fees, carriage, unloading from the primary carrier at the destination port, and destination port charges) and assumes all risk until arrival at the destination place.

DDP – Delivered Duty Paid (named place of destination)

The seller is responsible for delivering the goods to the named place in the buyer's country and pays all costs in bringing the goods to the destination, including import duties and taxes. The seller is not responsible for unloading.

logistics / incoterms

A freight forwarder organizes shipping for domestic and international trade. They arrange the logistics for how goods will be moved and stored during transit and work closely with the importers and exporters to ensure all customs clearance and other documentation is in place.

While freight forwarders don’t physically move the goods, they’re an efficient and cost-effective way to get products to market, especially for those exporting large volumes. Freight forwarders act as intermediaries between businesses and shipping companies and can use their network of trusted freight services to get good deals on freight charges.

Freight forwarding companies are experts in the transportation of goods, so individual businesses don’t have to be. They save importers and exporters the hours it would take to organize all the necessary documents, fees, and insurance themselves. Companies can also benefit from freight forwarders’ specialist knowledge of different countries' rules and regulations on imports and exports.

The transportation of goods across international borders requires any prospective freight forwarder to have a good knowledge of international trade law, customs services and procedures, and import duty. You’ll also need a solid understanding of shipping methods and insurance and a good grasp of overseas markets and regulations.

Due to the specialist knowledge and expertise needed for freight forwarding, you might want to undertake formal training. In some circumstances, specific qualifications are required by law, such as if your freight forwarding business involves transporting hazardous materials or dangerous goods.

Given the range of goods that can be shipped internationally and the variety of countries that need freight services, you should decide what you’ll focus on.

Are you aiming for long-term contracts with large manufacturers to oversee regular shipments? Or are you planning on specializing in a particular type of export?

Perhaps your focus will be on one air freight route? Or the end of the supply chain so you can specialize in road freight and local deliveries?

The scale of your ambitions will influence who your customers and competitors are. So it’s worth doing thorough research to see where your international shipping niche might be.