When engaging in international trade, understanding Incoterms (International Commercial Terms) is essential. These terms define the responsibilities of the buyer and seller regarding shipping, insurance, customs clearance, and delivery.
At Jangga Trade, we primarily offer EXW, FOB, CIF, and DDP shipping terms. This guide explains the differences and helps you choose the best option for your business.
🔹 Understanding Key Incoterms
| Incoterm | Who Handles Shipping? | Who Covers Insurance? | Who Handles Customs? | Best For |
|---|---|---|---|---|
| EXW (Ex Works) | Buyer | Buyer | Buyer | Experienced buyers with their own logistics |
| FOB (Free on Board) | Seller (to the port) | Buyer | Buyer | Buyers managing international shipping themselves |
| CIF (Cost, Insurance, and Freight) | Seller | Seller | Buyer | Buyers who want seller to handle shipping & insurance |
| DDP (Delivered Duty Paid) | Seller | Seller | Seller | Buyers who want a hassle-free, door-to-door solution |
📌 ➡ Each Incoterm affects pricing, risk, and responsibility for the shipment.
🔹 1️⃣ EXW (Ex Works) – Buyer Handles Everything
📌 Key Features:
✔ The seller (Jangga Trade) makes the goods available at our warehouse.
✔ The buyer arranges pickup, shipping, insurance, and customs clearance.
✔ The seller has no responsibility after the goods leave our facility.
📌 Pros & Cons:
✔ Lower cost for the buyer (no seller markup on logistics).
✔ More control over shipping and costs.
❌ Higher responsibility and risk for the buyer.
✅ Best for: Buyers with established logistics partners who can handle shipping and customs independently.
🔹 2️⃣ FOB (Free on Board) – Seller Delivers to Port
📌 Key Features:
✔ The seller is responsible for delivering goods to the port and handling export clearance.
✔ Once the goods are on board the ship, responsibility transfers to the buyer.
✔ The buyer arranges international shipping and import clearance.
📌 Pros & Cons:
✔ The seller ensures the goods are shipped correctly from the origin.
✔ Lower shipping costs for the buyer compared to CIF.
❌ The buyer must arrange and pay for overseas shipping & insurance.
✅ Best for: Buyers who have their own freight forwarders and want control over shipping costs.
🔹 3️⃣ CIF (Cost, Insurance, and Freight) – Seller Covers Shipping & Insurance
📌 Key Features:
✔ The seller arranges shipping to the buyer’s destination port.
✔ The seller includes insurance in the price, reducing buyer risk.
✔ The buyer is responsible for import duties and local delivery.
📌 Pros & Cons:
✔ Less risk for the buyer (insured shipment).
✔ The seller handles all logistics until the goods arrive at the port.
❌ Typically more expensive than FOB due to shipping & insurance costs.
✅ Best for: Buyers who want the seller to handle logistics but can manage customs clearance.
🔹 4️⃣ DDP (Delivered Duty Paid) – Hassle-Free Delivery to Buyer’s Location
📌 Key Features:
✔ The seller handles everything, including shipping, insurance, and customs clearance.
✔ The buyer only needs to receive the goods at their location.
✔ The seller pays all import duties and taxes (included in the price).
📌 Pros & Cons:
✔ No hassle for the buyer—fully managed shipping & customs.
✔ Predictable costs, as duties & taxes are included.
❌ The most expensive option due to added responsibilities on the seller’s side.
✅ Best for: Buyers who want a turnkey solution with no logistics hassle.
🔹 How to Choose the Right Shipping Term?
💡 Consider these factors when choosing an Incoterm:
✔ Do you have a freight forwarder? If yes, FOB or EXW is ideal.
✔ Do you want minimal risk? Choose CIF or DDP.
✔ Do you need the lowest price? EXW is usually the cheapest.
✔ Do you want the easiest process? DDP is the best hassle-free option.
🚀 Conclusion
Choosing the right Incoterm affects your total cost, responsibility, and risk. Jangga Trade offers flexible shipping solutions based on your business needs.
📌 💡 Need help deciding? Contact us for expert logistics advice! 😊
