Understanding Incoterms and Their Importance in Global Trade for Optimizing Cost Control in Logistic

Understanding Incoterms and their importance in global trade allows companies to control logistics costs more strategically. Each Incoterm defines who bears transportation, insurance, and customs charges, which significantly impacts pricing and budgeting. By selecting terms like CFR or DDP wisely, companies can forecast costs accurately and reduce the risk of surprise expenses. For instance, choosing DAP may give buyers predictable landed costs, while EXW offers more control but higher risk. Supply chain managers who know how to leverage Incoterms can negotiate smarter with partners and optimize freight spend. Clear responsibility division through Incoterms directly supports financial planning and operational efficiency in international logistics.