Incoterms 2020 Explained
Who pays for transport, insurance, and customs under each International Commercial Term, from EXW through DDP, FOB, CIF, and more.
All Incoterms guides
Tariff-Rate Quotas Explained: TRQs and Your Duty Bill
A tariff-rate quota is not a quota in the sense most people mean. Nothing is barred from entering. What changes is the duty rate, and getting the timing wrong on a time-sensitive commodity can mean paying substantially more than you planned.
Pro Forma Invoice in International Trade Explained
A pro forma invoice looks like an invoice but is legally a quotation, and that distinction matters at three separate points: customs entry, a letter of credit, and getting paid. Here is what CBP actually requires when the real invoice is not ready yet, and where treating the two documents as interchangeable causes real delay.
First Sale for Export: Lowering Your Customs Valuation
When goods move factory to middleman to importer, US customs law lets you pay duty on the earlier, lower price instead of what you actually paid, if you can prove it. Here is how first sale for export actually works, what CBP demands as proof, and why Congress is trying to abolish it this year.
ATA Carnets and Temporary Imports Explained
An ATA carnet moves goods across a border temporarily without paying duty or posting a local deposit. The rules changed in 2026: digital carnets went live in 30 territories on 1 June, and Mexico now demands pre-registration. Here is what a carnet covers, what it costs, and when it is the wrong tool.
Customs Post-Entry Amendments: Fixing a Filing Mistake After the Fact
A wrong value, code, or quantity on a customs entry does not have to become a compliance problem, as long as it is corrected the right way and within the right window.
Free Trade Agreement Certificates of Origin: How to Actually Use Them
A certificate of origin under a free trade agreement only saves duty if the product actually qualifies under the agreement's specific rules of origin, not just because it was made in a member country.
Anti-Dumping and Countervailing Duties: What Importers Actually Pay
Anti-dumping and countervailing duties can add far more to a landed cost than the regular tariff line. Here is what triggers them, how the rates are set, and how to check before you commit to a supplier.
Marine Pollutants and UN Numbers: Getting Classification Right
Marine pollutant status is an extra label on top of whatever your cargo already is. Plenty of ordinary products qualify, including detergents and paints.
Marine Cargo Insurance Documents: Certificate, Policy, Open Cover
Which insurance document you hold decides whether a bank will pay you. UCP 600 rejects a cover note outright, and that surprises people at the worst moment.
Limited and Excepted Quantities: When Full DG Rules Do Not Apply
Small quantities in small inner packagings pose less risk, and the regulations recognise it. Two separate regimes exist and they are frequently confused.
Cargo Marking and Labelling: What Goes on the Outside
The outside of the box is a document. It routes the cargo, tells handlers how to treat it, and in some cases is a customs requirement in its own right.
GDP Pharma Shipping: What the Rules Actually Require
GDP is about documented control, not about how cold the box was. Most forwarders who say they are GDP compliant cannot produce what compliance actually requires.
The Dangerous Goods Declaration: How to Get It Right
Most dangerous goods declarations are refused for the order of words in the shipping name, not for anything about the cargo. Here is how to complete one properly.
ISPM 15: Wood Packaging Rules and Why Shipments Get Rejected
The pallet under your cargo is regulated cargo in its own right. Untreated wood gets shipments refused entry, and the piece that fails is usually not the pallet.
Getting Paid: Credit Control for Freight Forwarders
Forwarding lends money whether it means to or not. The strongest debt-recovery tools you have are already in your trading conditions, most forwarders have never read them properly, and in the UK they changed on 31 December 2025.
How to Start a Freight Forwarding Company in the US: Licences, Bonds and Insurance
There is no single freight forwarder licence in the United States. There are four regimes run by three agencies, and which apply to you depends on what you will actually do. What each requires, what it costs, and what really sinks new forwarders.
Air Cargo Security in 2026: ACAS, Screening and Known Consignor Status
Advance data and physical screening are two different regimes, and both changed in the last year. What ACAS requires now, what the EU expects, and six widely repeated claims that the primary sources contradict.
Customs Binding Rulings: How to Get Certainty Before You Ship
A ruling binds CBP to a position on your goods, but only your goods, only if your facts were right, and only until it is revoked.
Customs Valuation: How the Dutiable Value Is Actually Calculated
The six methods, the five additions to the invoice price, and the First Sale rule, which is still alive despite what a lot of guidance implies.
US Customs Bonds: Single Entry vs Continuous, and How the Amount Is Set
What a bond actually guarantees, the formula behind the number, and why paying high duties does not use it up.
Foreign Trade Zones vs Bonded Warehouses: When Deferring Duty Pays
Both defer duty. Only one allows manufacturing, only one protects you from a rate rise, and recent tariff actions closed the biggest FTZ benefit.
Duty Drawback: How to Reclaim Duty on Goods You Re-Export
Up to 99% of duty back on re-exported or destroyed goods: the deadline nearly every article gets wrong, and which tariffs actually qualify.
Restricted Party Screening: What Exporters and Forwarders Must Check
The lists, the free official tool, why EAR99 does not mean unrestricted, and the ownership rule that blocks companies whose names appear on no list at all.
Rules of Origin: How to Claim Preferential Duty Without Getting It Wrong
Origin is about where goods were made, not where they shipped from. The three tests that confer it, what USMCA and EU claims require, and why enforcement got serious.
Freight Emissions Reporting in 2026: What Shippers Actually Have to Do
GLEC, ISO 14083 and Scope 3 explained, plus the rules that changed in 2026, including the one that caps what you can demand from small carriers.
Letters of Credit: How Document Discrepancies Delay Your Payment
Banks pay against documents, not goods. The discrepancies that stop payment, and how the shipping paperwork causes most of them.
Bill of Lading Types Explained: Original, Seaway, Telex and Switch
Which bill of lading releases your cargo, which one controls payment, and the mix-up that leaves containers sitting at destination.
Port-to-Port, Door-to-Door or DDP: What Each Freight Service Level Includes
Five service levels, what each one covers, and the charges that sit outside every single one of them.
Do You Need a Customs Broker? Broker vs Forwarder vs Filing Yourself
Three ways to clear customs, what each costs in money and risk, and the cases where self-filing is reasonable, plus the liability that never transfers.
How to Import from China to the USA: The Small Business Playbook
From supplier terms to delivered cargo: registrations, classification, the documents, who files what, and the timeline to plan against for a first China import.
Import Duty from China to the USA: How to Calculate What You Will Pay
Duty from China is now several layers stacked on one entry. How the calculation works, where each rate comes from, and how to estimate before you commit to an order.
How to Find a Verified Freight Forwarder (Without Getting Burned)
"Verified" means nothing until you know who verified what. The six credentials worth checking, where to check each one yourself for free, and the references that actually reveal something.
US Tariffs in 2026 After the IEEPA Ruling: What Importers Actually Pay
The Supreme Court struck down IEEPA tariffs in February 2026 and the duties were rebuilt under other statutes within months. What applies now, and how refunds work.
EU De Minimis Removal 2026: The 3 Euro Flat Duty Explained
The EU ended its 150 euro duty exemption on 1 July 2026. What the transitional flat fee means for ecommerce sellers, 3PLs and anyone shipping parcels into Europe.
CBAM Definitive Period: The 2026 Importer Checklist
CBAM moved from reporting to paying on 1 January 2026. What authorised declarant status means, who is exempt under the 50-tonne rule, and what to do before February 2027.
Customs Audit Readiness: The Import Records You Must Keep
Duty rates rose, so audit activity followed. A practical guide to the records importers must retain, how long to keep them, and the four findings auditors raise most.
Import Documentation Checklist: Everything You Need for a Smooth Customs Clearance
Missing or incorrect import documents are the top cause of customs delays. Use this checklist to make sure every shipment is documented correctly first time.
HS Codes Explained: How to Find the Right Code for Your Cargo
HS codes determine your import duty rate in every country. Getting them wrong is costly. Learn how the Harmonised System works and how to find the right code for your products.
DDP vs DAP vs FOB: Understanding International Delivery Terms
DDP, DAP, and FOB are the three most commonly misunderstood Incoterms. Learn exactly what each one means, who pays what, and which is right for your trade.
Customs Clearance and Trade Compliance: The Complete Shipper's Guide
Master customs clearance, HS codes, incoterms, import documentation, and trade compliance, everything you need for smooth international shipments.
Incoterms FAQ
What is the most common Incoterm for ocean export?
FOB (Free on Board) is widely used for ocean exports: the seller delivers goods on board the vessel at the port of shipment and risk transfers once loaded. Buyers often prefer FOB when they want to control ocean freight and insurance.
When should I use DDP instead of DAP?
Use DDP when the seller arranges and pays import duties and taxes at destination. Use DAP when the buyer handles import clearance and duties: the seller delivers to an agreed place but does not pay destination customs charges.
Does CIF include insurance?
Yes. Under CIF (Cost, Insurance and Freight) the seller must procure minimum marine insurance for the buyer benefit while the goods are in transit. The buyer should verify coverage limits meet their cargo value and risk profile.
Can I use EXW for international shipments?
EXW places maximum obligation on the buyer, including export clearance from the seller country. Many sellers cannot or will not export under EXW; for international trade FCA, FOB, or CIF/CFR are usually more practical.
Which Incoterm should I use for containerised cargo?
Use FCA, CPT, or CIP rather than FOB, CFR, or CIF. The sea-only rules assume cargo is loaded across the ship's rail, but containers are handed over at a terminal days before loading, so under FOB the seller keeps risk during a period when they no longer control the goods. FCA is the correct equivalent of FOB for containers.
How many Incoterms are there in the 2020 edition?
There are 11 rules, in two families. Seven work for any transport mode: EXW, FCA, CPT, CIP, DAP, DPU, and DDP. Four apply only to sea and inland waterway transport: FAS, FOB, CFR, and CIF. DPU replaced and widened the previous DAT rule in the 2020 edition.
Do Incoterms decide who owns the goods?
No. Incoterms allocate cost, risk, and responsibility for customs formalities. They say nothing about when title or ownership transfers, nor about payment terms or what happens if the contract is breached. Those must be dealt with separately in the sale contract. Assuming an Incoterm transfers ownership is one of the most common and most expensive misunderstandings in international trade.
What is the difference between DAP and DPU?
Unloading. Under DPU the seller must unload the goods at the named destination; under DAP the buyer unloads. Everything else is the same, including that the buyer handles import clearance and pays duties under both. DPU is the only Incoterm that obliges the seller to unload, so only agree it where the seller can realistically arrange equipment at that location.