The Incoterms (International Commercial Terms) are internationally recognized rules that clearly define the obligations of buyers and sellers in international trade in goods. Published by the International Chamber of Commerce (ICC), they determine who is responsible for transportation, insurance, customs clearance and costs. The Incoterms® 2020 version is currently valid.
The 11 Incoterms are divided into two groups:
An online retailer from Germany sells goods to Canada. DDP (Delivered Duty Paid) is agreed in the purchase contract. This means that the seller bears all costs and risks up to delivery to the buyer — including customs duties and import taxes. If EXW (Ex Works) had been chosen, the buyer would have had to take over all logistics from the factory.
For fulfillment service providers such as EMIRAT Fulfillment, Incoterms are crucial to correctly handle shipping processes internationally. Especially with DDP or DAP, warehouse logistics and customs processing must work together smoothly.
