Understanding Incoterms in 2026

Three letters on a purchase order decide who pays for freight, who carries the risk, and who stands at the customs window. Get them wrong and a "cheap" import gets expensive fast.

The three you'll actually use

EXW (Ex Works): you collect from the factory gate and handle everything after. Maximum control, maximum work — best for experienced importers with their own forwarder.

FOB (Free On Board): the seller loads the vessel; you own everything from the ocean leg onward. The workhorse of container imports — clear cost split, clear risk transfer at the ship's rail.

DDP (Delivered Duty Paid): the seller delivers to your dock, duties included. Simplest for the buyer, but you lose visibility — and often overpay buried freight margins.

Our rule of thumb

If you import regularly, buy FOB and let your own broker — ideally us — control the ocean leg and clearance. Pre-filed entries and pre-booked drayage turn port chaos into same-day delivery, as our trans-Pacific program proves sailing after sailing.

Whatever term you sign, put it in writing with a named place ("FOB Shanghai" not just "FOB") and agree who files the ISF. Most penalties we clean up started as handshake assumptions.