Procurement & finance
Incoterms
The standard three-letter codes defining where risk and cost transfer from seller to buyer in an international sale — EXW, FOB, CIF, DDP and the rest. They decide who pays for what, and who is holding the risk when something goes wrong at sea.
The most consequential thing an Incoterm does is fix the moment risk passes. Under EXW, the goods are yours the moment they leave the seller’s door — including the container that goes over the side.
And they are routinely quoted without being understood. A buyer comparing an EXW price to a DDP price is comparing a bare unit cost to a delivered one, and will award the wrong supplier while believing it has saved money.