Incoterms

What are Incoterms? A clear explanation for freight forwarders

Incoterms are indispensable in the world of international trade and transport. But what exactly are Incoterms? And how do you use them as a freight forwarder in your daily work? In this article, we explain it in a way that is directly applicable to SME forwarders in the Netherlands - whether you are active in sea freight, air freight, road transport or intermodal transport.

What does Incoterms mean?

Incoterms stands for International Commercial Terms. They are standard agreements that clarify who is responsible for transport, insurance, customs formalities and costs during the transportation of goods. These agreements are recognised worldwide and have been drawn up by the International Chamber of Commerce (ICC).

With Incoterms, you avoid misunderstandings between buyer and seller, because everyone knows what he or she is responsible for in the logistics process.

Why are Incoterms important for freight forwarders?

For freight forwarders, Incoterms determine when responsibility for the shipment shifts from seller to buyer. This directly affects issues such as:

• Transport planning
• Insurance
• Customs documentation
• Cost sharing
• Risk management

As a freight forwarder, it is crucial that you understand how Incoterms work. Only then can you properly advise your customers and avoid problems with international shipments.

How do Incoterms work in practice?

Each Incoterm consists of a three-letter abbreviation followed by an agreed place (e.g. a port or warehouse). An example: FOB Rotterdam means “Free On Board”, where the seller delivers the goods on a ship at the port of Rotterdam.

The most commonly used Incoterms are:

EXW - Ex Works

The buyer arranges everything from the moment the goods are available from the seller. The seller has minimal obligations.

FOB - Free On Board

The seller delivers the goods on board a ship. From then on, the buyer takes over the risk and costs.

CIF - Cost, Insurance and Freight

The seller pays for transport and insurance up to the agreed port, but the risk lies with the buyer before that.

DDP - Delivered Duty Paid

The seller bears all costs and risks, including import duties. The buyer only has to unload.

Which Incoterms are relevant to your SME shipping business?

For SME executives in the Netherlands, it is essential to be familiar with Incoterms 2020, the latest version. Whether you are dealing with an air shipment to Asia or a container transport within Europe, the right Incoterm makes all the difference.

In addition, you can help customers by advising them on the most appropriate Incoterm, tailored to their role (buyer or seller), their logistical requirements and their risk appetite.

Does Sprinter 3000 work with Incoterms?

Yes, Sprinter 3000 supports all common Incoterms as standard. Within our software, you can select the right Incoterm for each shipment. This ensures:

• Consistent communication with customers and partners
• Automatic documentation (such as invoices and notes of lading) with correct Incoterm data
• Faster handling of customs formalities

So you avoid mistakes and save time - crucial for any efficient shipping company.

Frequently asked questions about Incoterms

Who decides which Incoterm is applicable?

The Incoterm is usually agreed in the sales contract between buyer and seller. As a freight forwarder, however, you can advise which term best suits the transport route.

How often do Incoterms change?

The ICC releases a new version about every 10 years. The current valid version is Incoterms 2020. Make sure your knowledge and systems are up to date.

Can you combine Incoterms with all modes of transport?

Not all Incoterms are suitable for every type of transport. Some are specifically designed for maritime and inland navigation (such as FOB, CIF), while others are suitable for all modalities (such as EXW, DDP, CIP).

Ready to work more efficiently with Incoterms?

At Sprinter 3000, we understand how important correct Incoterm application is for your daily work. Our software helps you work accurately, quickly and error-free - so you can focus on your customers and their shipments.

Request a demo today and discover how Sprinter 3000 optimises your shipping process - including smart Incoterm integration.

Summary: What are Incoterms?

Incoterms are international agreements on responsibilities when transporting goods. They determine who pays, who insures and who bears the risk. As a freight forwarder, Incoterms are indispensable for carrying out your work correctly and efficiently. Sprinter 3000 helps you achieve this by cleverly integrating Incoterms into your workflow.

What do they say about this:

• KVK
• EvoFenedex