Incoterms are terms for international business. They define factors such as the delivery conditions for merchandise, and they must be accepted by both parties to a purchasing contract. That’s why, when a business is looking to import from China, the question arises, “what is the best Incoterm for importing from China?”

Today, we’ll explain the most important Incoterms that we work with, so that you can select the one that best fits your needs.

1. Incoterm FOB: Under this Incoterm, the importer is responsible for paying, contracting, and managing the maritime shipping of the goods, but does not need to assume full the responsibility for the shipment. 

This is one of the most preferred Incoterms, because it allows for full control of each of the shipment subprocesses, as well as negotiation of prices and the terms of importing.

Seller’s obligations under Incoterm FOB

• Delivery of merchandise and necessary documentation
• Packaging
• Transportation within the country of origin
• Customs clearance within the country of origin
• Exit costs for country of origin

Buyer’s obligations under Incoterm FOB

• Payment for merchandise
• International maritime freight costs
• Arrival costs at destination country
• Customs clearance for destination country
• Transportation within the destination country
• Payment of taxes and tariffs

1. Incoterm DDP: This Incoterm, which stands for “Delivery Duty Paid”, indicates that the seller must deliver the merchandise to the buyer at a previously arranged location, as well as assuming all of the related expenses, including costs for unloading the goods, and any customs processes or fees that may apply.

Under this Incoterm, the seller accepts full responsibility for the transportation of the merchandise up to the point of their unloading in the agreed-upon location – including all the costs and risks associated therewith.

Seller’s obligations under Incoterm DDP

• Delivery of merchandise and necessary documentation
• Packaging
• Transportation within the country of origin
• Customs clearance within the country of origin
• Exit costs for country of origin
• International maritime freight costs
• Arrival costs at destination country
• Customs clearance for destination country
• Payment of taxes and tariffs
• Transportation within the destination country

Buyer’s obligations under Incoterm DDP

• Payment for merchandise

If your company needs assistance with the selection of the best Incoterm for your business, click here to contact us!

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