Incoterms 2020 explained for AdeptLink buyers and suppliers
Incoterms 2020 are 11 standardized trade terms defining who pays for transport, insurance, and customs at each point of the supply chain. The four most common on AdeptLink are EXW (buyer handles everything), FOB (supplier delivers to port), CIF (supplier delivers + insures to destination port), and DDP (supplier delivers door-to-door including duty). 67% of AdeptLink orders use FOB or CIF.
Key facts
- 67% of AdeptLink orders use FOB or CIF; 18% use DDP; 9% use EXW; 6% other.
- DDP shipments cost 12-22% more than FOB but eliminate buyer customs work.
- Insurance under CIF is mandatory at 110% of invoice value per ICC Clauses.
What are the four Incoterms most buyers should know?
EXW (Ex Works): Buyer collects from the supplier's factory and pays everything from there. Cheapest unit price, highest hassle.
FOB (Free On Board): Supplier delivers to the named port of shipment and loads onto the vessel. Buyer takes over from there. Best balance of cost and control for experienced importers.
CIF (Cost, Insurance, Freight): Supplier covers freight and insurance to the destination port. Buyer handles import clearance and last mile.
DDP (Delivered Duty Paid): Supplier delivers door-to-door, paying all freight, insurance, duty, and last-mile. Most expensive but zero buyer customs work — best for first imports or low-volume buyers.
How does AdeptLink compute landed cost for each Incoterm?
When the buyer enters destination at quote stage, AdeptLink calls our freight rate engine (covering 47 carriers) and customs duty engine (HS code + destination country) and adds the appropriate components based on the supplier's quoted Incoterm. The buyer always sees the all-in landed cost regardless of which Incoterm the supplier quoted.
Frequently asked questions
- Which Incoterm is safest for first-time importers?
- DDP. The supplier handles everything including customs clearance and import duty, so you receive the goods at your warehouse with no surprises. DDP costs 12-22% more than FOB but removes the risk of customs delays for buyers without a customs broker.
- Who is liable if goods are damaged in transit?
- Liability transfers per Incoterm: under EXW the buyer is liable from the moment goods leave the factory; under FOB, from the moment goods cross the ship's rail; under CIF, the seller's insurance covers up to the destination port; under DDP, the supplier is liable until door delivery.
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