Incoterms are your buying terms with your supplier or, if you are doing the exporting, your selling terms to your overseas client. The most commonly used terms are:
- Exworks: This means you pay all costs from the suppliers warehouse to your warehouse.
- FOB (Free on Board): This means that the supplier is liable to pay all local charges, from their warehouse to on-board the vessel.
- CIF (Cost, Insurance & Freight): This means that the supplier pays all charges from their warehouse to the destination airport or sea port.
- DDP (Delivered Duty Paid): This means the supplier will pay all charges from their warehouse to your warehouse. It includes Duty and Tax.
- DDU (Delivered Duty Unpaid): This means that the supplier will pay all charges from their warehouse to your warehouse excluding the Duty and Tax charges.