Which Incoterm Should You Use? A Step-by-Step Guide for Sellers and Buyers
Incoterms® define far more than who arranges shipping — they set out exactly where cost, risk, and customs responsibility shift from one party to the other. Get the wrong term into a contract, and you can end up exposed to costs you didn't plan for, customs formalities you're not equipped to handle, or disputes over who was actually liable when something went wrong.
The trouble is, the 'right' Incoterm isn't always obvious. It depends on a combination of factors: who's arranging transport, whether goods are moving by sea, air, or road, whether they're containerised, who's able to handle import or export formalities, and how much financial and compliance risk each party is willing to carry.
These two decision flowcharts — one built for sellers, one for buyers — break that decision down into a simple series of yes/no questions. Work through the relevant flowchart for your side of the transaction, and you'll land on the Incoterm that best reflects your commercial position, your operational capability, and your appetite for risk.
Whether you're quoting a sale, reviewing a purchase contract, or simply want to sense-check a term you've already agreed to, this resource gives you a quick, practical way to check your choice — before it becomes a problem further down the line.
