Incoterms to Consider When Importing Hardware from China

Incoterms is the term used to define international trade standards used worldwide for imports. The same ones your company should know when importing hardware from China. Being aware of the 11 that are there will be a great help to know which one to choose for your business. Read more!

What are incoterms?

As mentioned before, the Incoterms are a series of rules governing international trade. They were created in 1936 by the International Chamber of Commerce (ICC). The purpose was to establish good trade relations between countries. The Incoterms (International Commercial Terms) are updated every 10 years to be a true reflection of changes in the framework of international trade.

Therefore, the obligations, rights and responsibilities of the buyer and seller (importers and exporters) are defined so that there are no misunderstandings in business. In turn, it indicates who should take care of the costs of the operation.

Today’s Most Used Incoterms

If you do not want to have any doubts about the conditions of delivery of your imports of hardware and furniture and construction accessories, you should know what the rules of voluntary acceptance between seller and buyer say:

  • EXW. The vendor’s obligations end when the goods are made available to the buyer at the point of origin. The importer must therefore deal with transport to the destination warehouse.
  • FCA, FAS and FOB. These three Incoterms extend the supplier’s responsibility. They do so until the time of delivery of the goods in the means of transport. Such transport must be contracted by the importer.
  • CIF, CPT, CIP and CFR. The commitment of the supplier increases because he must be in charge of contracting the transport. Please note that among its obligations is not to be liable for possible damage or loss to the goods.
  • DAP, DDP and DPU (DAT). These Incoterms stipulate that the supplier must take care of everything, including expenses and possible risks until the goods arrive in the destination country.


Remember that despite the changes below, the previous 2010 regulations remain valid. Therefore, it is necessary to specify the year of the version of the Incoterm to be used in each contract.


Incoterms 2020, changes from 2010 standards

Every 10 years incoterm rules are updated. The last was in January 2020, approved in May 2019 by the ICC World Council.

Here are what’s new:

  • DAT becomes DPU. The term DAT (Delivered at Terminal) is changed to DPU (Delivered at Place Unloaded). It means that the goods must now be left at the place agreed by the two parties.
  • Increased control in maritime transport. Incoterms FCA, FAS and FOB are responsible for strengthening maritime transport standards in order to improve supplier safety. In this case, the seller may have a shipping letter stating that the goods have been delivered.
  • The International Chamber of Commerce makes available to interested parties a mobile App. The ICC has created an application so that companies can quickly consult all these terms.
  • A new arrival Incoterm called CNI (Cost and Insurance) is created. It includes the cost of international insurance at the seller’s account. The buyer is responsible for the transport once it is at the port of departure.
  • Transport by third parties. The new standard says that in the cases of FCA, DAP and DPU the seller can take care of the transport himself or contract the services of a third party.


At IBMH, we will take care of a custom study to help your hardware company import the products you need in the best conditions. If you want your imports to be safe and cost-effective, do not hesitate to have our comprehensive purchasing management service in China. Contact us today!