Definition
Incoterms® are published by the International Chamber of Commerce. The current version is Incoterms 2020. Each rule (EXW, FCA, FOB, CIF, DAP, DDP, and others) defines where risk and cost transfer. They are not a complete sales contract and are not tax advice. “DDU” is legacy wording — use DAP or DPU under Incoterms 2020.
Worked example
A quote “US$3.20/unit FOB Shenzhen” means the seller gets goods on board in Shenzhen; you pay ocean freight, insurance, import clearance and onward delivery. The same goods “DDP Midlands 3PL” price in delivery and import formalities differently.
Why it matters for replenishment
Wrong Incoterms blow up landed cost and lead-time assumptions — the two inputs replenishment needs most for imports.
Guides & calculators
Educational overview of common shipping terms including Incoterms® 2020 concepts. Not legal, customs or tax advice. Incoterms® is a trademark of the International Chamber of Commerce (ICC). Confirm the exact rule and named place in your contract, and speak to your freight forwarder or adviser for live shipments.