Incoterms 2020: Practical Guide for Azerbaijan Importers
Incoterms 2020: Practical Guide for Azerbaijan Importers
What are Incoterms?
Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC). They define how costs, risks and responsibilities are divided between seller and buyer.
The 2020 version is currently in force.
The 6 Most-Used Terms
EXW (Ex Works)
Seller makes goods available at their warehouse. All subsequent costs (loading, transport, customs, insurance) fall on the buyer.
For Azerbaijan importers: Maximum control, maximum responsibility. Only recommended for buyers with strong logistics expertise.
FOB (Free On Board)
Seller delivers goods to the named port of shipment. Risk transfers to buyer once goods are loaded onto the vessel.
For Azerbaijan importers: ✅ Most popular choice. You control the sea freight and get better rates through your own forwarder.
CIF (Cost, Insurance, Freight)
Seller delivers to destination port and pays for insurance.
For Azerbaijan importers: Convenient, but sellers typically choose high freight rates and minimum insurance. Often more expensive than FOB.
DAP (Delivered at Place)
Seller delivers to named destination. Customs duty and VAT are the buyer's responsibility.
For Azerbaijan importers: Very convenient. You only manage local customs clearance.
DDP (Delivered Duty Paid)
Seller pays everything: freight, insurance, customs duty, VAT. You simply receive the goods.
For Azerbaijan importers: Most convenient but most expensive. Sellers build customs costs into their margin.
Comparison Table
| Term | Seller Covers | Buyer Covers | Risk Transfers |
|---|---|---|---|
| EXW | Prepare at warehouse | Everything | At factory |
| FOB | Deliver to port | Sea freight + customs | At port loading |
| CIF | Port + insurance | Customs | At destination port |
| DAP | Door delivery | Customs + tax | At door |
| DDP | Everything | Nothing | At door |
Practical Recommendation for Azerbaijan
For companies importing from China, Turkey and Europe, FOB is the optimal choice:
- You choose sea/air freight (better rates via Trazeroad)
- You control the customs process
- You choose your insurance
DDP only makes sense when the seller works with a licensed customs broker in Azerbaijan.
How Trazeroad Helps
Trazeroad handles all Incoterms: picks up FOB shipments from port, handles customs for CIF/DAP cargo, manages the full DDP service end-to-end. Contact us to discuss the best terms for your supply chain.