What is Incoterms structuring?
Incoterms are internationally agreed trade terms that govern who, buyer or seller, bears which costs, risks and formalities during an international shipment. The Incoterms 2020 version contains eleven terms, each with its own distribution of responsibilities across transport, insurance, customs handling and risk transfer.
For shippers the choice of the right Incoterm is one of the most impactful commercial decisions that returns structurally on every transaction. A wrongly chosen Incoterm can lead to unexpected cost bearers (think of terminal handling suddenly resting with you), to unclear liability on damage or delay, and to disputes with customers or suppliers that only surface months after shipment.
Well-structured Incoterms are not one size fits all. For different customer categories, suppliers and regions a different Incoterm typically fits. A large retail customer in Germany may work very well under DAP, while e-commerce customers in Brazil require a DDP setup to make the purchase predictable for them. A structured Incoterms approach makes these choices conscious and consistent.
When is an Incoterms review relevant?
A structured Incoterms review is sensible at multiple moments. When drafting or renewing contract templates for customers or suppliers. With recurring discussions about who is responsible for specific costs or risks. With international expansion entering new markets with different customs and risk profiles. With transition to Incoterms 2020 in contracts still running under the old version. And with compliance reviews where current Incoterms choice is held against the light.
Specifically for shippers with a mix of sea, air and road transport a review is valuable to ensure the Incoterms match the modality. FOB for container shipments, EXW for customers with own logistics, and CPT for intermodal shipping each require specific attention.
Our approach
We map which Incoterms you currently use per customer segment, supplier and lane. Differences, inconsistencies and exceptions become visible in a structured overview.
Per customer category and supplier segment we evaluate which Incoterm structurally fits better, based on cost, risk, liability, customer experience and operational complexity.
We build a matrix with recommended Incoterm per segment, with substantiation per choice and visualization of the shift in responsibilities versus the current setup.
The new Incoterms choice is processed in your contract templates for customers and suppliers, including associated clauses on insurance, customs handling and transport costs.
Your sales and purchasing team is trained in the new Incoterms choice, the argumentation toward customers and suppliers, and the practical operational consequences.
What you get
- Current Incoterms inventory with gap and risk analysis
- Recommended Incoterm matrix per customer and supplier segment
- Substantiation per choice with visualization of responsibility transfer
- Adjusted contract templates for customers and suppliers
- Implementation plan for commercial teams
- Training material for sales and purchasing
Frequently asked questions
What is the difference between Incoterms 2010 and Incoterms 2020?
Incoterms 2020 introduce among other things DPU (replaces DAT), clarify FCA for containers and sea freight, and tighten the insurance requirements under CIP. For most shippers the practical differences are limited, but contracts have used the new version as standard reference since 2020. Older contracts with the old version remain valid as agreed.
DAP or DDP, what is better for my export?
DAP and DDP differ mainly on who pays import duties and possibly VAT. Under DAP the buyer pays, under DDP the seller. For sellers DAP is typically safer because import duties and local taxes can be unpredictable. DDP is more customer-friendly but places the regulatory risk with the seller. The right choice depends on your market, your margins and your risk appetite.
Why is FCA often better than FOB for container shipments?
FOB is designed for loading of break-bulk goods on the deck of the ship. For container shipments stacked in a terminal that moment is hard to pinpoint, with uncertainty about when risk transfers and who is responsible for terminal handling charges. FCA places the risk transfer point at a more logical location (the terminal or transit hub) and is therefore the recommended alternative for container shipments since 2020.
How do I explain a new Incoterm to my customers?
An Incoterm change is essentially a commercial change presented by your sales team. With every recommendation we deliver a commercial substantiation with visual overview of who does and pays what under the old versus new Incoterm. Many customers accept the change when they see the advantage for their own position.
Does Incoterms choice also apply to intra-EU shipments?
Yes, Incoterms are not limited to international shipping. For intra-EU the right Incoterm is sometimes less relevant because there are no customs formalities, but the liability and cost transfer remains important. A structured choice prevents discussions about who is responsible where in case of damage or delay.
An Incoterms review for your contracts?
Schedule a call where we walk through which segments fit in scope and what a revision would deliver for your company.