Understanding Incoterms 2020 for Thai exporters

Incoterms (International Commercial Terms) define exactly where risk and cost transfer between buyer and seller. The 2020 edition has 11 terms, and choosing the right one affects your pricing, insurance obligation, and customs handling.

For Thai exporters shipping FCL by sea, FOB Bangkok or FOB Laem Chabang remains the most common choice — the buyer arranges and pays for ocean freight, while you handle origin charges and clear export customs. CIF adds carriage and insurance to the destination port, suitable when buyers want a delivered price.

For air freight and high-value cargo, CIP (Carriage and Insurance Paid to) is more appropriate than CIF, since it includes insurance regardless of transport mode. DAP and DDP push more responsibility onto the seller — DDP includes duties and taxes at destination, which most Thai exporters avoid because foreign tax obligations are difficult to estimate.

The golden rule: never quote a price without specifying the Incoterm AND the named place.