How Exporters Navigate Transportation and Incoterms [Survey Data]

Expanding your business into international markets opens exciting doors, but when navigating the logistics of getting your goods from Point A to Point B you might be overwhelmed with options. Our recent survey polled fellow exporters to uncover their preferred methods of transportation and the Incoterms 2020 rules they use most, offering valuable insights to inform your own choices.

This is the fourth article sharing the results of our survey of exporters. Other articles cover the top challenges facing exporters; how exporters handle documentation, FTAs and AES; and how they manage compliance, licenses and restricted party screening. 

Air Freight Soars

For many exporters, speed is a top priority: Our survey revealed that 85% of exporters rely on air freight. It’s the most expensive way to ship your goods (typically air cargo rates are calculated by weight), but time-sensitive goods, perishables and high-value goods are all good fits for air freight. We explain more about what can and cannot be shipped by air, how rates are calculated and how it compares to ocean freight in our article International Air Freight: An Overview.

Ocean Freight: Reliable Routes for Larger Shipments

While air freight reigns supreme in speed, 70% of exporters use ocean freight, likely for its cost-effectiveness and capacity to handle larger shipments. Nearly anything can be shipped by ocean freight. We explain more about when it makes the most sense to ship by sea, how it is priced, how long it takes and when you should consider another option in our article International Ocean Freight: Everything You Need to Know. 

Land Transport for Regional Journeys

Transport by land (trucks, trains, etc.) offer flexibility and can be particularly cost-effective for shorter distances, making them a valuable asset for logistics managers. Our survey found that 64% of exporters use land transportation.

The Convenience of Hand-Carrying (with Cautions)

For certain situations, hand-carrying goods across borders can be an attractive option—10% of exporters use this method—particularly if an employee is already traveling in the desired direction. It can be cost-effective and efficient, offering an immediate solution for smaller shipments. However, there are obvious limitations in terms of volume and distance, and there are risks you need to be aware of—we explain what they are and how to avoid them in the article Import Compliance: The True Cost of Hand Carries.

Most-Used Incoterms 2020 Rules

Incoterms 2020 rules play a crucial role in clarifying risks and responsibilities throughout the shipping process. Our survey shed light on the most popular choices:

• Ex Works (EXW), 58%: Places all risk and costs on the buyer after pickup at the seller's premises.
• Free Carrier (FCA), 53%: Transfers responsibility and costs to the buyer once the goods are loaded onto a specified mode of transport at a designated location.
• Delivered at Place (DAP), 42%: The seller clears the goods for export and covers the cost and risk of delivering the goods to the named foreign destination not unloaded.
• Delivered Duty Paid (DDP), 33%: Seller assumes all costs and risks until goods are delivered to the buyer's designated location, including customs clearance.
• Cost, Insurance, Freight (CIF), 28%: Seller covers the cost of shipping and insurance until the goods are loaded on board the vessel at the port of shipment.
• Free on Board (FOB), 23%: The seller clears the goods for export and delivers them when they are on board the vessel at the named port of shipment. Buyer assumes all risks and costs for goods from this moment forward.

And here is how often the rest of the Incoterms 2020 rules are used: Carriage Paid To (18%), Cost and Freight (16%), Carriage and Insurance Paid To (14%), Delivered at Place Unloaded (5%) and Free Alongside Ship (4%). 

Incoterms Resources

Incoterms play too important of a role in international transactions to leave their usage up to chance. Here are some additional resources for learning more:

• For more information about each specific Incoterms 2020 rule, download the free whitepaper: An Introduction to Incoterms® 2020 Rules.
• For a summary of seller and buyer responsibilities under each of the terms, download the free wall chart: Incoterms® 2020 Chart of Responsibilities and Transfer of Risk.
• To ensure you are properly using Incoterms on your export paperwork, see how Shipping Solutions export documentation and compliance software can help you quickly prepare accurate export documents. Register for a free online demo.

More Insights from Exporters

Choosing the right transportation method and Incoterm depends on your specific needs, budget and desired level of control. By understanding the advantages and limitations of each option, you can make informed decisions that optimize your export journey. And sometimes it helps to understand how other exporters operate. If you need help in other areas, read our previous articles sharing survey results related to export compliance, documentation and more.

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