Recently, our team hosted a webinar on the role and function of Incoterms in global trade, presented by Lucia Trandafir, Head of TradeWindow Academy. With over 30 years in international freight, Lucia shared practical, real-world knowledge that exporters and freight forwarders may find useful. Below are the key takeaways from the event:

 

What are Incoterms? 

Incoterms (International Commercial Terms) are a globally accepted set of rules published by the International Chamber of Commerce (ICC). They define the responsibilities of buyers and sellers in international transactions, specifically focusing on:

• Obligations – Who does what? (e.g., shipping, documentation, insurance)

• Risk – When does the risk of loss and damage transfer from seller to buyer? 

• Costs – Who pays for which parts of the shipping and handling process? 

Critically, Incoterms do not govern ownership transfer or payment terms, that’s handled separately in the sales contract.

 

Why Incoterms matter 

For exporters and freight forwarders, Incoterms simplify and clarify: 

• Risk management – Knowing precisely when goods are “delivered” in terms of liability. 

• Cost calculations – Accurately building quotes, invoices, and customs values for duty and tax.  

• Dispute prevention – Clearly defined roles reduce confusion and disagreements. 

 

Exporter Insights: Pricing and Documentation 

Exporters should understand how Incoterms affect price builds and document preparation:

• EXW (Ex Works): Minimum seller responsibility. Buyer arranges everything from pickup to import clearance. 

• CIF (Cost, Insurance, Freight): Seller handles much more, including freight and insurance,  up to the buyer’s port. 

• DDP (Delivered Duty Paid): Seller bears nearly all costs and risks, right to the buyer’s door, including import duties. 

Tip: The further along the Incoterm (from EXW to DDP), the higher the seller’s obligations and the more comprehensive the pricing must be. 

In TradeWindow’s Prodoc system, these terms translate directly into fields that determine freight charges, customs values, and insurance declarations, ensuring full compliance and transparency.

 

Freight Forwarder Considerations: Clarity in Services 

Freight terms like “port-to-port” or “door-to-door”, often used in the freight industry, differ from Incoterms. These phrases describe logistics services, not contractual obligations of the seller and buyer.

However, aligning them with the right Incoterm is key:

Freight Term	Aligned Incoterm	Arranged by
Place to Port	FCA / FOB	Seller’s Forwarder
Port to Port	CFR / CIF	Carrier
Port to Place	FOB, CFR, CIF	Buyer’s Forwarder
Place to Place	DAP/DPU/DDP	Seller or Full Service

Tip: For freight forwarders, knowing the Incoterm clarifies who pays for what, ensuring accurate billing and service scope.

 

Custom Declarations & Risk Transfer 

In the Speedi and Freight applications demonstrated during the webinar, Incoterms automatically inform:

• FOB valuation for customs: Critical for calculating duties. 

• Insurance documentation: Especially under CIF/CIP, where the seller must provide insurance certificates. 

• Freight cost attribution: Ensures that GST and duties apply correctly per NZ Customs requirements. 

The role of Incoterms in global freight is more than just compliance, it’s about clarity, control, and risk mitigation. Whether you’re an exporter building accurate quotes or a freight forwarder coordinating logistics services, understanding Incoterms ensures smoother operations and better customer service.

 

Webinar Materials Recap:

View the webinar recording, along with the slide deck on The role and function of Incoterms in global trade, via the form below:

 

 

Need help aligning your documentation with the right Incoterm?

TradeWindow’s suite of tools — Prodoc, Speedi, and Freight — embed Incoterm logic into your export processes, reducing risk and increasing efficiency. Reach out to our team here.