Incoterms 2020 Explained for Miami Importers: Who Pays for What

If you import through PortMiami, Port Everglades, or Miami International Airport, the three-letter code on your purchase order decides more than you might think: who books the freight, who insures it, who clears customs, and where responsibility for your cargo actually changes hands. These codes are Incoterms — International Commercial Terms published by the International Chamber of Commerce — and the 2020 edition is the version in use today.

This guide walks through the terms Miami importers see most often and explains how each one affects the final leg: getting cargo from the port to your warehouse.

What Incoterms actually do (and don’t do)

Incoterms define two things between a buyer and a seller: who pays for each stage of transport, and where risk transfers from seller to buyer. They do not cover ownership of the goods, payment terms, or what happens if the product arrives defective — those belong in your purchase contract.

There are 11 terms in Incoterms 2020, but in practice a handful cover the vast majority of import transactions into South Florida.

The Incoterms Miami importers use most

EXW — Ex Works

The seller makes goods available at their factory or warehouse; you handle everything from there, including export clearance in the origin country. EXW gives you maximum control and maximum responsibility. It usually only makes sense if you have a freight forwarder with a strong presence at origin.

FOB — Free On Board

The seller delivers the goods on board the vessel at the origin port and clears them for export. Risk transfers to you once the cargo is loaded. FOB is the workhorse term for ocean freight into PortMiami: you control the ocean carrier, the insurance, and the destination charges, which makes landed-cost planning much more predictable.

CIF — Cost, Insurance and Freight

The seller pays freight and minimal insurance to the destination port, but risk still transfers at origin when goods are loaded. Many first-time importers pick CIF because it feels simpler, then discover they have no control over destination charges or carrier choice. Watch for inflated destination handling fees on CIF shipments.

DAP and DDP — Delivered at Place / Delivered Duty Paid

Under DAP the seller delivers to a named place — which can be your Miami warehouse — with you handling import clearance and duties. Under DDP the seller also clears customs and pays duty. DDP sounds effortless, but a foreign seller acting as importer of record into the U.S. adds risk and cost, and post-de-minimis e-commerce rules have made DDP structures harder to run cleanly.

Where the warehouse handoff fits

Whatever term you buy on, cargo still needs a place to land once it clears the port. That handoff point is where a local 3PL earns its keep.

Under FOB or CIF, your forwarder arranges drayage from PortMiami or Port Everglades to a receiving warehouse. Positioning that warehouse minutes from the port — like our warehousing facility — keeps drayage short and reduces demurrage exposure.

If your goods arrive before duty is paid or before you have a buyer, a bonded warehouse lets you store imports with duties deferred for up to five years. If cargo is moving straight through to trailers for distribution, cross-docking skips storage entirely.

Practical tips for choosing a term

Negotiate FOB when you can. Controlling the ocean leg usually saves money and always improves visibility. Ask for itemized destination charges before agreeing to CIF. Never accept EXW unless your forwarder can handle origin export formalities. And regardless of the term, confirm your delivery address and receiving warehouse before the shipment sails — changing the destination mid-voyage is expensive.

Frequently asked questions

Which Incoterm is best for a first-time importer in Miami?

FOB is the most common recommendation. The seller handles origin formalities and loading, while you and your forwarder control the ocean freight, insurance, and destination handling — which keeps costs transparent.

Do Incoterms decide who pays U.S. customs duty?

Only DDP places import duty on the seller. Under every other term, the U.S. buyer is responsible for customs clearance and duties, typically through a licensed customs broker.

Does risk transfer at the same point where costs transfer?

Not always. Under CIF and CFR the seller pays freight to destination, but risk transfers at the origin port when goods are loaded. That is why buyers under CIF should verify the insurance actually covers their interest.

Ready to plan the destination leg of your next import? Request a free quote and secure flexible warehouse space minutes from PortMiami.