News &market updates

Incoterms explained: who pays for what?

Incoterms are international rules that define who arranges and pays for each part of a shipment, and where the risk passes from seller to buyer. The four terms we use most:

• EXW (Ex Works): the goods are ready at the seller's warehouse. The buyer arranges loading, transport, export and import.
• FCA (Free Carrier): the seller hands the goods, export-cleared, to the buyer's carrier. The buyer arranges the main transport.
• DAP (Delivered at Place): the seller delivers to the agreed address. The buyer handles import clearance and duties, where they apply.
• DDP (Delivered Duty Paid): the seller delivers to the door and takes care of import clearance and duties.

Which one fits depends on whether you have your own forwarder and how much of the process you want to handle yourself. Our interactive explainer shows the split for each term.

Shipping inside and outside the EU: what changes

Within the EU, goods move freely between member states. There is no customs clearance, and business-to-business sales are normally invoiced with the VAT reverse-charge rule. Road shipments travel with a CMR transport document.

Outside the EU, more is involved. Goods need an export declaration when they leave the EU, and import clearance at the destination, where duties and import taxes may apply. A commercial invoice and packing list are needed for customs, and air or sea shipments travel with an air waybill or bill of lading.

Businesses that import or export generally need an EORI number. If you are unsure what applies to your shipment, ask our team.