Choose the right Incoterms for an international shipment
Explains where cost, risk, and responsibility pass under each candidate Incoterm and recommends one for my situation.
The prompt
Help me choose the right Incoterm for an international purchase or sale.
Am I buying or selling? [BUYER / SELLER]
Goods and value: [WHAT, SHIPMENT VALUE]
Route and mode: [ORIGIN, DESTINATION, OCEAN FCL / LCL / AIR / ROAD / MULTIMODAL]
Our capabilities: [DO WE HAVE A FREIGHT FORWARDER, CUSTOMS BROKER, IMPORT/EXPORT LICENSE IN EACH COUNTRY?]
What I care about most: [lowest cost / control of freight / least risk / simplicity for the other party]
Incoterms being proposed: [e.g. "supplier offered FOB Shanghai, I'm considering DAP"]
Payment method: [e.g. letter of credit, open account]
For each Incoterm under consideration (and up to 2 better alternatives), explain:
- Exactly where risk transfers and where cost transfers (these can differ).
- Who books and pays main freight, export clearance, import clearance, duties, and insurance.
- Whether it suits the transport mode (e.g. FOB and CIF are meant for sea and inland waterway, not containers handed over at a terminal or for air).
- Common traps: DDP when the seller cannot act as importer of record, EXW when the buyer cannot handle export formalities, insurance minimums under CIF and CIP.
Give general information based on Incoterms 2020; ask me to confirm the version in the contract. Advise checking duties, licensing, and letter of credit wording with a customs broker or trade advisor.
Return:
1. A comparison table: Incoterm | Risk transfers at | We pay | They pay | Fit for my case.
2. My recommended term with the reason.
3. The exact wording to put on the PO or contract, including the named place.
4. Questions to ask my forwarder before confirming.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Thinking & Decisions prompts
What to fill in
- BUYER / SELLER
- WHAT, SHIPMENT VALUE
- e.g. "supplier offered FOB Shanghai, I'm considering DAP"
- e.g. letter of credit, open account
How this prompt is built
This prompt follows the Few-Shot structure (Few-shot prompting). A few-shot prompt includes one or more worked examples of the input and the output you want, so the model can copy the pattern instead of guessing it.
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