Determining when goods are considered delivered is a key aspect of international trade. It defines when the risk transfers from the seller to the buyer, how transport costs are allocated and which party is responsible for each stage of the logistics process.

In international transactions, the main point of reference is the Incoterms® rules published by the International Chamber of Commerce (ICC). These internationally recognised trade terms specify where delivery takes place, when the risk passes from seller to buyer, who arranges transportation, who bears the related costs and which party is responsible for customs formalities.

The Incoterms® 2020 rules include eleven terms grouped according to the responsibilities assigned to each party. A few examples help explain how they work.

Under Group E, represented by EXW (Ex Works), the seller fulfils its obligation by making the goods available at its premises. From that point onwards, the buyer assumes the risk and is responsible for organising transportation.

Group F, which includes FCA, FAS and FOB, requires the seller to deliver the goods to the carrier nominated by the buyer or, depending on the agreed rule, alongside or on board the vessel. Risk transfers at the agreed delivery point, while export customs clearance generally remains the seller’s responsibility.

Under Group D, including DAP, DPU and DDP, the seller remains responsible for the shipment until it reaches the agreed destination. The transfer of risk therefore occurs much later in the transport process, providing the buyer with greater protection throughout the journey.

Choosing the right Incoterm is far more than a contractual formality. It has a direct impact on costs, risk allocation and the overall management of an international shipment. Selecting the most appropriate rule from the outset helps prevent misunderstandings and ensures that both parties clearly understand their respective responsibilities.

Working with an experienced logistics partner such as Tecnofreight means having expert guidance in selecting the most suitable Incoterm and managing every stage of the international shipping process efficiently and reliably.