Incoterms® 2020: Who Is Responsible for What?
9/14/20261 min read
Incoterms® 2020: Who Is Responsible for What?
International trade involves much more than moving goods from one country to another. At every stage, someone must be responsible for transportation costs, customs clearance, insurance, delivery, and risk.
Incoterms® 2020 are internationally recognised trade rules that define key responsibilities between the seller and buyer during the movement of goods.
Terms such as EXW, FCA, FOB, CIF, DAP and DDP determine where responsibilities sit and, importantly, where risk transfers from the seller to the buyer.
For example, under EXW (Ex Works), the buyer takes on most of the transportation responsibility from the seller's premises. Under DDP (Delivered Duty Paid), the seller takes on most responsibilities until the goods reach the agreed destination, including import clearance and duties.
Why Do Incoterms Matter?
Choosing the wrong Incoterm can lead to unexpected freight costs, customs problems, insurance gaps, delays, and disputes over who was responsible when something went wrong.
Understanding Incoterms helps businesses negotiate better contracts, calculate the true landed cost, allocate risk clearly, and make better procurement and logistics decisions.
How Finest Leaders Can Help
Finest Leaders Business Services supports organisations across UAE – Dubai through Logistics & Supply Chain Projects and Customised B2B Training, helping teams strengthen procurement, freight management, supply chain controls, and international trade knowledge.