Eliminate trade risks by clearly defining cost and responsibility at every transaction stage.
Enter estimated costs ($) below. Allocation updates automatically.
What is an Incoterms Cost Responsibility Tool?
The Incoterms Cost Responsibility Tool is a decision-support tool that helps exporters, importers, and traders clearly understand cost, risk, and responsibility allocation under different Incoterms® rules. It provides a structured breakdown of who pays for what, who carries risk, and where liability transfers in an international trade transaction, helping businesses avoid costly misunderstandings and contract disputes.
How can an Incoterms Cost Responsibility Tool help you?
This tool helps traders quickly compare Incoterms and understand their financial and operational impact before finalizing contracts. It reduces ambiguity around freight costs, insurance, customs clearance, and risk transfer points, enabling better pricing decisions, cleaner negotiations, and fewer post-shipment disputes.
How do Incoterms Cost Responsibility tools work?
The tool maps each Incoterm against key trade stages such as origin handling, main carriage, insurance, export/import clearance, and final delivery. Based on the selected Incoterm, it visually and logically assigns cost ownership and risk responsibility between buyer and seller across the shipment lifecycle.
How to use Grains Global’s Incoterms Tool?
Advantages of using Grains Global’s Incoterms Cost Responsibility Tool
Many traders assume cost and risk transfer happen at the same point. They often don’t. Under several Incoterms, the seller may pay for freight while risk transfers earlier. Misunderstanding this can lead to uninsured losses, disputes, and margin erosion. This tool helps separate cost responsibility from risk ownership clearly.
EXW (Ex Works)
Seller’s responsibility ends at their premises. Buyer handles almost everything, including export clearance. Often misused in international trade.
FOB (Free On Board)
Seller delivers goods on board the vessel. Risk transfers once goods are loaded. Suitable only for sea freight, yet frequently misapplied elsewhere.
CIF (Cost, Insurance, Freight)
Seller pays for freight and minimum insurance, but risk transfers once goods are on board. A classic example where cost and risk move at different points.