When shipping goods internationally, it’s essential to have a clear understanding of the responsibilities, costs, and risks associated with moving your cargo. That’s where Incotermscome in. At Book Cheap Freight (BCF), we believe in making sea freight as straightforward as possible for our clients, which is why we help you navigate the complexities of Incoterms.

In this blog, we’ll break down what Incoterms are and how they impact your sea freight shipping with BCF.

What Are Incoterms?

Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC). They define the responsibilities of sellers and buyers in international transactions, outlining who is responsible for shipping, insurance, and customs duties at each stage of the process. In sea freight, using the right Incoterms ensures clarity and helps avoid misunderstandings about who handles what.

Why Incoterms Matter in Sea Freight

Incoterms are crucial because they determine key factors such as:

• Who pays for shipping costs?
• At what point is the risk transferred from the seller to the buyer?
• Who handles export and import customs clearance?

Choosing the right Incoterm is essential for ensuring your shipment moves smoothly, minimizing both delays and unexpected costs. At BCF, we make sure our clients are fully informed about their responsibilities under each Incoterm.

Common Incoterms Used in Sea Freight

While there are 11 Incoterms in total, some are more commonly used in sea freight. Let’s look at the ones most relevant to BCF’s sea freight services:

• FOB (Free on Board): Under FOB, the seller is responsible for all costs and risks until the goods are loaded onto the vessel. After that, the buyer assumes responsibility for shipping and delivery costs. This is one of the most widely used terms in sea freight.
• CFR (Cost and Freight): With CFR, the seller arranges and pays for the transportation of goods to the destination port, but the buyer takes on the risk once the goods are loaded onto the ship. The buyer also handles customs duties and import taxes.
• CIF (Cost, Insurance, and Freight): Similar to CFR, but in CIF, the seller is also responsible for purchasing marine insurance to cover the goods during transit. However, the buyer still assumes the risk once the goods are on board.
• EXW (Ex Works): EXW places the most responsibility on the buyer, as they handle all logistics and costs from the seller’s premises to the final destination. While not exclusive to sea freight, EXW is often used when the buyer has more control over their shipping process.
• DAP (Delivered at Place): DAP means the seller takes on all the costs and risks of delivering the goods to the agreed location, but the buyer is responsible for customs duties and taxes.

How Incoterms Affect Your Costs and Liability

When shipping with BCF, the Incoterm you select directly affects your overall shipping costs and responsibilities. For example, choosing FOB may save you upfront costs by shifting the responsibility to the buyer once the goods are loaded onto the ship, but it means you’ll have less control over the logistics beyond the port of origin.

On the other hand, opting for CIF ensures that you (the seller) cover the transportation and insurance costs, but you also maintain control over the shipment for a longer period, which may give you more peace of mind.

BCF’s Approach to Incoterms

At BCF, we work closely with you to determine the most appropriate Incoterm for your specific shipment. By understanding your business needs and preferences, we help you strike the right balance between cost, risk, and responsibility.

Whether you’re new to international trade or experienced with shipping, our team at BCF is here to guide you through the process. We ensure that your Incoterms are clearly defined and adhered to, helping you avoid unnecessary delays or unexpected costs.

Conclusion: Making Incoterms Work for You with BCF

Incoterms can seem complicated, but with the right partner, they don’t have to be. At Book Cheap Freight (BCF), we take the guesswork out of sea freight logistics, helping you understand your responsibilities and ensuring a smooth shipping process. Whether you’re using FOB, CIF, or any other Incoterm, our goal is to make international shipping simple and efficient.

For more information or help with choosing the right Incoterm for your next shipment, get in touch with BCF today.