You’ve scouted the market, found your ideal supplier, and even agreed on the price. Just as you’re about to place your order, the quotation lands in your inbox, complete with three cryptic letters next to the shipping cost: FOB, CIF, FCA, DDP.
These aren’t just random codes. They’re Incoterms® 2020, a set of international trade rules that spell out who pays for transport, who sorts out customs, and exactly when the risk passes from your supplier to you. They might look like small print, but trust me, they shape every step of your shipment’s journey.
For Kenyan businesses moving goods across borders, picking the wrong Incoterm can mean extra charges, unexpected delays, and even costly disputes. So, before you sign on the dotted line, here are six questions you should always ask your supplier.
Incoterms® 2020 are trade rules published by the International Chamber of Commerce (ICC), and they create a common language for buyers and sellers worldwide. They clarify who’s in charge of transport, who handles customs, who pays for what, and when the responsibility for your goods switches from the supplier to you.
Of the eleven Incoterms in use today, seven work for any kind of transport. The remaining four are just for sea and inland waterway shipments. Your choice affects your shipping bill, your customs paperwork, and how much control you have over your cargo.
This is the big one. Many importers assume responsibility shifts the moment the goods arrive on Kenyan soil. Not quite. Under each Incoterm, the transfer point is different.
Take EXW, for example: responsibility passes as soon as the goods are ready for pick-up at the seller’s premises. With FOB, the shift happens once your goods are loaded onto the vessel. FCA means responsibility moves when the goods reach your nominated carrier, and with DDP, your supplier carries all the risk until delivery right at your doorstep.
Don’t leave this to chance. Ask your supplier to be crystal clear about when the handover happens. It’s a small step that can prevent major misunderstandings.
The price on your quotation rarely tells the full story. Some Incoterms make the seller pay for the main leg of transport, while others leave it up to you. But remember, paying for transport doesn’t always mean you’re carrying the risk.
Before you commit, double-check which costs are covered by your supplier and which ones you’ll need to handle on your end.
Customs can get tricky. In most cases, your supplier will clear the goods for export, but you’ll be responsible for import clearance, duties, and taxes once the shipment lands in Kenya. DDP is the exception. It puts the full burden, including import paperwork, on the supplier.
If you’re new to importing, make sure you know who’s preparing the customs documents and whether you’ll need to appoint your own clearing agent.
Not all shipments are covered the same way. Only CIF and CIP Incoterms require the seller to organise minimum cargo protection, and even then, the level of cover isn’t always the same.
If you’re bringing in high-value or urgent goods, ask your supplier how the cargo will be protected during transit and whether the arrangements meet your needs.
Not every supplier is up to speed with every Incoterm. Some are experienced with FOB, but might struggle with DDP deliveries to Kenya. It pays to ask how comfortable your partner is with the Incoterm you’re considering. Their answer can help you decide if the terms will really work for both of you.
There’s no single Incoterm that’s right for everyone. The perfect choice depends on your goods, how you’re shipping them, where they’re headed, and how you want to share responsibilities with your supplier.
Think of the Incoterm as part of your deal, not just paperwork. Sometimes, a small tweak can give you more control, lower your costs, or make the shipping process much smoother.
The Incoterm you choose sets the tone for your entire shipment, from who pays and who’s in charge, to where the risks lie. Understanding your responsibilities before you commit can save you from headaches, surprises, and unnecessary costs.
Still unsure which Incoterm is right for your business? With a DHL Business Account, you’ll get expert support in international shipping, customs guidance, real-time shipment tracking, and handy tools that make cross-border trade easier for Kenyan businesses.
Incoterms® 2020 – International Chamber of Commerce (Official)
A Complete Guide to the Incoterms® 2020 Rules – Trade Finance Global
Incoterms 2020 Defined: Guide on the Latest Changes – Velotrade
Incoterms 2020 Explained: All 11 Rules, Risk Transfer & Selection Guide – SupplyChainMath
Incoterms 2020, Shipping, and Trade Terms Defined – Cosmo Sourcing
Incoterms aren’t something you want to leave to chance or to your supplier. Instead, choose them together as part of your business negotiation. This way, you can consider who’s best positioned to handle transport, manage customs paperwork, and cover shipping costs. For Kenyan businesses importing from China, it’s especially important to look at your supplier’s location, shipping know-how, and how well they handle export documentation. Making these decisions up front, before you accept a quote, can save you time, money, and avoid misunderstandings. For step-by-step advice, see Practical Steps for Kenyan Importers Sourcing from China.
HS codes and Incoterms do different jobs, but both matter if you’re trading across borders. Incoterms spell out who handles what, the buyer or the seller, while the HS code tells customs how to classify your goods for duties, taxes, and rules. A wrong HS code can hold up your shipment at customs or lead to extra charges, even if your Incoterm is spot on. Make sure you’re using the right product codes to keep your cargo moving smoothly. For a full breakdown, check out Decoding Product Codes: Essential Tips for Kenyan Exporters.
Your commercial invoice is one of the first things customs officials look at when your shipment lands. By clearly stating the agreed Incoterm and the specific location, you help everyone, customs included, see who’s responsible for freight, duties, and other costs. This cuts down on confusion and speeds up clearance at the border. For Kenyan shippers, getting this document right can make all the difference. Learn more with Fast-Track Your Shipments: The Commercial Invoice Checklist for Kenya.
Before you lock in your deal, make sure you’ve seen and understood all the key documents that will travel with your goods. This includes the commercial invoice, packing list, transport documents, and any special certificates your products require. Reviewing these papers early helps you spot potential issues and ensures both you and your supplier are on the same page about who handles what. Kenyan SMEs can find a full rundown in Kenyan SMEs: Your Export Paperwork Checklist.
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