Questions and answers about INCOTERMS

  • DAP and demurrage

    QUESTION: Here’s a question for our Incoterms experts.  We had a shipment from the US to MX, and the Incoterm was DAP-customer’s door.  Under DAP terms, the buyer is responsible for the customs clearance.  However, the buyer’s broker took a very long time to perform the clearance, racking up high demurrage costs.  Who is responsible […]

  • INCOTERM training

    QUESTION: Where does the responsibility for INCOTERM Training fall in most companies – logistics, procurement, sourcing, legal or trade compliance? I assume procurement/sourcing because they are the dept that negotiates the terms of sale, pricing etc.   I could see logistics but the logistics team really just follows the INCOTERM language in the agreement when it […]


    QUESTION: We export product from Canada and the US to various markets globally. In the cases of those with FCA or FOB origin port (in North America), where the customer makes their own ocean bookings and we deliver to the port based on that booking, who is responsible for the shippers letter of instruction or […]

  • FCA/EXW shipment from CN to US

    QUESTION: There is a company in the US who is leasing iso tanks to our company in the US. They are using a manufacturer in China to produce these tanks. We will be the IOR though and take over with pick up in China. We are leasing the tanks, the terms of the agreement is […]


    QUESTION: Can anyone explain why DAP Laredo would be preferable to FCA Laredo for shipments to my maquila?  My MX broker is insisting we send all goods to the Laredo border under DAP terms, but is unable to explain why.  Only that it is somehow advantageous from a Mexican import perspective. =============================================== Answers: Assuming you […]


    QUESTION: How do we calculate CIF value if we’re shipping under our global insurance policy (not insurance specifically obtained for the shipment at hand)?  What’s the value of the insurance?  A percentage of the premium?  A percentage of the shipment value? =========== Answer: You would need to work with your finance and cost accounting team […]


    QUESTION: Before you respond, This is more of an academic question for those interested to better understand and learn about trade and logistics.  I know the intended meaning of the phrase “free domicile” – the exporter/shipper in the exporting country is responsible for all transportation and other charges for the goods in the country of […]

  • DDP Importing

    QUESTION: Under DDP terms, can you request an Entry packet from the supplier that is handling your company’s import? ========== Answers: You can request anything you want.  If the terms are DDP, and you are not the IOR, it is not “your company’s import.”  You are merely the consignee, and have no responsibility for the […]

  • Ex Works

    QUESTION: We sold a piece of used heavy equipment to a customer in St. Maarten on an ExWorks basis in May. Turns out the item has a blown engine, is unfixable, and we have already credited the customer for the cost of the machinery. From a compliance standpoint can we sell the equipment in St. […]

  • Incoterms and contracts

    QUESTION: We have written agreements specifying the opposite of the incoterm.  For example, an export will be under CFR and the written agreement will state risk of loss transfers at the destination port.  If there were an issue, what do we go by, the incoterm or written agreement? ************** Answers: Legal contract supersedes INCO Terms. […]


    QUESTION: We have divisions who ship direct to customer through e-commerce websites. Orders shipped are usually anywhere from $10 to $100, or more, depending what is being purchased by the customer, e.g. one month supply of coffee or candy. What are the proper Incoterms when shipping from the US to US customers, Canada, Mexico, or […]

  • Incoterm Risk

    QUESTION: Our company does business with about 16 different foreign suppliers in Thailand, Korea, China, and Taiwan.  Almost all of our purchases are made with these foreign suppliers using ex-works as the incoterm.  Under this incoterm our company assumes the responsibility for the export declarations.  We’re concerned that utilizing this term exposes our company to some […]