Incoterms are the backbone of global trade. Whether you're a first-time exporter or a multinational distributor, the Incoterm you choose can impact your pricing, risk exposure, delivery timelines, and customer relationships. As shipping rules evolve in 2025, choosing the right Incoterm is more critical than ever.

Understanding the Role of Incoterms

Incoterms define:

• Who pays for transportation

• Who carries the risk at each stage

• Who handles customs documentation

• Where responsibilities transfer from seller to buyer

These rules reduce confusion and ensure both parties are aligned before cargo moves.

Key Factors to Consider When Choosing an Incoterm

1. Your Level of Experience

New exporters often choose Incoterms with fewer responsibilities, such as EXW or FCA, while experienced exporters may handle CIF or DAP.

2. Buyer and Seller Negotiation Power

A seller offering end-to-end logistics may select DDP, while buyers who prefer control may opt for FOB or CFR.

3. Destination Market Complexity

Some countries have strict import procedures. Choosing an Incoterm where the buyer handles customs clearance may reduce risk.

4. Cargo Type

For fragile, hazardous, or temperature-sensitive goods, choosing terms that ensure proper handling and insurance is essential.

Best Incoterms for Different Scenarios

• Best for Small Exporters: FCA, FOB

• Best for Large Exporters: CIF, CFR

• Best for E-commerce & SMEs: DAP

• Best for Maximum Control: EXW

• Best for High-Value Goods: CIP

Selecting the right Incoterm reduces risk, enhances customer satisfaction, and ensures smoother trade operations. Falcon Freight’s specialists can guide you in choosing the ideal term for your cargo.