Milan, Italy – Savino Del Bene is pleased to announce the completion of its new logistics hub in the hinterland of Milan. With over 12,000 m² of warehouse space, 3,000 m² of offices and 400 m² occupied by a dedicated customs warehouse, the new hub will function as the reference point for the entire group in Northern Italy. An interesting highlight is the 250 m² space dedicated to cool rooms (+4°C/+39°F; +15°C/+59°F) for controlled-temperature products, ensuring a broad and dedicated offer for the Food and Beverage sector.

The strategic location in Peschiera Borromeo – one hour’s drive from Malpensa Airport, two hours from Genoa and 15 km from the center of Milan – enables the company to optimize the customer’s entire supply chain, also thanks to the goods collection and delivery service available throughout Central and Northern Italy.“It was our long-held ambition to equip Milan with a more modern, efficient and international branch that could also be commercially attractive and more sustainable work-wise. This global reach is fueled by the desire to serve our customers more closely, as also attested by our other investments in Lombardy, in Montichiari and Bergamo, and the enhancing of the Milan Project branch (in the Bovisa district),” explains Stefano Marranci, Managing Director for Italy.

Benefiting the local territory is another important commitment: “The construction project renovated the entire area, transforming an abandoned industrial warehouse into a modern and multifunctional facility equipped with a photovoltaic plant that helps to satisfy the facility’s overall energy needs, with its 500 kW of power generated.”

The new building houses the Milanese branch of Savino Del Bene and the group’s global subsidiaries: Albatrans, Aprile and General Noli. The decision will favor operating synergies and the sharing of resources and know-how for enhancing efficiency and improving the global network of services.

The new logistics hub:

Savino Del Bene S.p.A.
Strada comunale della Bellaria n. 7/9
20068 Peschiera Borromeo

Transshipment is a common yet fundamental practice in logistics, designed to ensure that goods reach their final destination efficiently. Whether it’s about optimizing costs, adapting to complex routes, or responding to operational constraints at the ports of origin or destination, transshipment represents a strategic solution.

But what exactly is transshipment? When is it used? And why has it become so relevant in global trade? Let’s find out with Savino Del Bene.

What is transshipment? definition and key features

Transshipment is a logistics operation that involves transferring goods from one transport unit to another during their journey to the final destination. This process typically occurs at a port or logistics hub, where containers are unloaded from one vessel and loaded onto another ship, truck, or train.

The meaning of transshipment should not be confused with transit or multiple shipping: transshipment implies a physical change of vessel, even if within the same transport contract. Key features of transshipment include flexibility, the ability to reach destinations not directly connected, and cost optimization.

When is transshipment used?

Transshipment is employed in many areas of international logistics, often representing either a necessary or strategically advantageous choice for supply chain operators. Here are the main situations where it is used:

• Lack of direct routes: when there are no direct sea routes between the origin and destination ports, transshipment allows the shipment to proceed via intermediate logistics hubs;
• Cost optimization: splitting the route into several legs can be more cost-effective, especially by leveraging economies of scale at major transshipment ports;
• Cargo consolidation: transshipment is often an integral part of consolidated shipping, where cargo from multiple shippers is brought together at a single hub for forwarding to common or similar destinations;
• High season and port congestion: during seasonal peaks or congestion, transshipment enables more flexible volume management, avoiding delays and overloads;
• Structural or technical limitations: some ocean vessels cannot dock at smaller ports due to depth or infrastructure limitations; in such cases, transshipment to smaller vessels is essential;
• Multimodal integration: for shipments combining different modes of transport, transshipment is crucial to ensure continuity and consistency across the supply chain.

In all these scenarios, transshipment is an effective solution to ensure continuity, reach, and control in global freight flows.

Direct Shipping vs transshipment: key differences

One of the most common questions concerns the differences between direct shipping and transshipment. Both aim to move goods from point A to point B, but they do so in very different ways.

Direct Shipping

Direct shipping means the goods are loaded onto a single transport mode that completes the journey to the final destination without stops or carrier changes. It’s a simple and linear solution, ideal when there are direct maritime connections between the origin and destination ports. The main benefits of this method are speed and lower operational complexity: minimizing intermediate handling reduces the risk of damage, loss, or delays. However, this option is not always available or cost-effective.

Transshipment

In transshipment, goods are transferred from one transport unit to another at one or more intermediate stops, which act as logistics hubs. This process makes it possible to connect locations that cannot be reached with a single leg. Transshipment is widely used in containerized maritime transport and plays a key role in global logistics chains. Although it involves more complex management, it offers greater flexibility, geographical reach, and cost efficiency, especially for large-volume shipments or complex destinations.

Direct Shipping vs transshipment: comparison table

Top 5 busiest transshipment ports in the world

Transshipment is an essential component in the operations of hub ports, which serve as redistribution centers for goods headed across the globe. Some ports have become strategic nodes for container traffic, moving millions of TEUs every year. Here are the top five busiest transshipment ports in the world.

Singapore

The Port of Singapore is recognized as the largest and most advanced transshipment hub globally. Thanks to its strategic location along key maritime routes between Asia, Europe, and the Middle East, it handles a significant share of global container traffic. It is renowned for its high level of automation, operational efficiency, and fast turnaround times, making it a regional benchmark for transshipment in Southeast Asia.

Shanghai

In addition to being one of the busiest ports in the world by total volume, Shanghai plays a crucial role as a transshipment center for Eastern China. Goods from intercontinental routes are redistributed here to smaller domestic ports. The port is well-connected to China’s rail and logistics networks, enabling integrated cargo flow management.

Shenzhen

Located in Guangdong, one of the world’s most active manufacturing regions, the Port of Shenzhen is a major transshipment hub for goods produced in China. It is divided into several terminals (including Yantian, Shekou, and Chiwan) that form a highly specialized system. The port supports an extensive feeder network connecting China’s industrial zones to global markets.

Busan (Pusan)

The Port of Busan in South Korea is the country’s main maritime hub and one of the world’s leading transshipment ports. Located in northeast Asia, it effectively connects Asia with Europe and North America. It is valued for its infrastructure capacity, terminal efficiency, and quick handling times, making it a strategic choice for transpacific shipping.

Hong Kong

Although it has lost some volume to Chinese ports like Shenzhen and Guangzhou, Hong Kong remains a major transshipment hub in the region. Its commercial legacy, favorable location, and customs independence still make it a key passage point for goods moving between mainland China and the rest of the world.

Transshipment, us tariffs and the global context: what’s happening

In the current international trade landscape, transshipment has come under increasing regulatory focus—particularly in the United States. This is especially relevant when goods are routed through third countries that benefit from preferential trade agreements, raising concerns about the correct identification of origin.

In this context, logistics operators and exporters need to pay particular attention to compliance with rules of origin, and in particular to the concept of substantial transformation, which plays a key role in determining the actual country of origin of a product.

Understanding what constitutes a substantial transformation is crucial. For example, if individual ingredients from multiple countries (such as sugar, flour, dairy, and nuts) are combined and processed into cookies in another country, the resulting product is considered substantially transformed. However, simpler processes—like mixing and freezing vegetables, repackaging, or dilution—typically do not qualify as substantial transformation, and the product must retain the original countries of origin.

U.S. Customs is increasingly requiring detailed documentation to verify these transformations and ensure that goods are properly declared. Failure to comply can lead to penalties, including reclassification of origin and higher tariffs.

At the same time, international trade policies are diverging: while the U.S. tightens its enforcement, other global players—such as the European Union and ASEAN countries—are moving toward greater openness and harmonization. This evolving context reinforces the importance of transparency, accuracy, and regulatory knowledge across the supply chain.

In this evolving scenario, transshipment remains an essential tool for connecting markets and optimizing routes—but it now demands greater awareness, compliance, and regulatory alignment. Partnering with experienced providers capable of navigating regulatory complexity is therefore crucial to ensure operational continuity and shipment security.

In this regard, it is worth noting that customs authorities often carry out inspections on goods in transit at transshipment terminals. In such cases, the freight forwarder is promptly informed afterwards by the ocean carrier, ensuring constant shipment monitoring even during such inspections.

Conclusion

Whether you’re shipping to locations not directly connected or looking to optimize time and cost, transshipment is a powerful logistics tool. However, relying on expert partners is essential to ensure security, traceability, and compliance. With a global presence and tailored sea, land, and air freight services, Savino Del Bene is the ideal partner to support you at every stage of the supply chain. For more information, contact your local Savino Del Bene representative.

In August 2025, Savino Del Bene officially announced the opening of its new office in Cairo, Egypt.

With a population of over 100 million, Egypt is experiencing remarkable growth in the infrastructure and energy sectors. This further expansion, just a few months after the opening of the Head Office in Alexandria, Egypt, is part of the company’s development strategy in North Africa, which will support operations across vast areas of Africa and the Middle East.

Office Address:

Savino Del Bene EG
Office 125, Cargo Village Street
Cairo International Airport, 11661, Cairo

The new office will provide global customers with a local presence within Cairo International Airport and a key point of contact for the company’s air and logistics services in this fast-growing economy

RO-RO transport, an acronym for Roll On Roll Off, is a specialized maritime shipping method that allows goods to be loaded and unloaded via mobile ramps, without the need for cranes or special equipment. It is particularly suitable for transporting vehicles, industrial machinery, trucks, and rolling cargo, offering an efficient and practical solution for fast and secure international shipments.

In this article by Savino Del Bene, we will delve into the features, operations, and benefits of this transportation method.

What is RO-RO transport?

RO-RO, literally Roll On Roll Off, describes a specific type of maritime shipment where cargo is loaded and unloaded directly via dedicated ramps. This method is primarily used for vehicles, agricultural and industrial machinery, fully loaded trucks, wheeled cargo, and any other type of cargo that can be loaded onboard using mafi trailers.

RO-RO differs from other methods such as container shipping (Lift On Lift Off – LO-LO) because it doesn’t require vertical handling with cranes, thus reducing operational times and optimizing costs. Additionally, while oceangoing merchant vessels typically measure cargo by weight (tons), RO-RO cargo is usually measured in LM (Linear Meters).

How does RO-RO work?

RO-RO maritime transport follows a well-defined and rapid operational procedure, optimizing safety and efficiency in cargo handling. Let’s look at the main stages of this logistic process.

Preparation and arrival of cargo at the port

Vehicles or rolling cargo to be shipped (cars, trucks, tractors, agricultural, and industrial machinery) are prepared with complete documentation and transported to the dedicated RO-RO terminal. Here, security conditions are verified and loading operations are planned. In case the freight is not rolling cargo, it will be secured on mafi trailers and towed into the vessel holds with port tugs.

Loading cargo onto the RO-RO ship

Cargo is directly loaded onto the ship via integrated ramps (“Roll On”). Vehicles are accurately positioned on internal decks and securely fastened using specialized systems such as chains or straps, ensuring stability during navigation.

Arrival and unloading at the destination port

Upon arrival at the final port, the RO-RO vessel opens its ramps, allowing rapid and direct unloading of the cargo (“Roll Off”). At this stage, customs checks may be conducted, and subsequently, vehicles are directed to dedicated port areas for pick-up or onward land transport.

Delivery and continuation of shipment

After unloading, vehicles or goods are delivered directly to the final recipients or transferred to intermediate logistic facilities.

Choosing an experienced partner such as Savino Del Bene ensures an efficient and accurate service throughout every stage of sea shipping, particularly in sectors like industrial and agricultural machinery.

RO-RO ships: key features

RO-RO ships possess distinctive characteristics making them particularly suitable for transporting rolling cargo, ensuring speed, safety, and operational efficiency. Let’s explore these features in detail:

• Integrated ramps: equipped with integrated mobile ramps allowing quick entry and exit of cargo directly from the dock to the loading deck. This avoids using cranes or vertical lifting systems, significantly speeding up port operations and reducing dock time;
• Multiple and flexible internal decks: RO-RO vessels feature multiple internal decks designed to accommodate vehicles and rolling cargo of various sizes and heights. These spaces are often modular, allowing rapid layout adjustments to accommodate various cargo types, from lightweight vehicles to large industrial machinery;
• Specialized fastening systems: cargo safety during voyages is ensured by specialized fastening systems. Chains, wedges, and straps secure each unit firmly to the ship’s floor, preventing accidental movement even in unfavorable marine conditions;
• Operational efficiency and reduced times: horizontal loading and unloading operations allow RO-RO cargo ships to significantly reduce port operation times compared to other maritime transport types. This efficiency translates into lower operational costs and faster delivery times—significant advantages for companies frequently shipping goods or requiring urgent deliveries;
• Cargo versatility: Another strength of these ships is their ability to easily adapt to diverse cargo types. Cars, trucks, buses, tractors, agricultural, and industrial machinery can all be moved swiftly on the same vessel without structural modifications, making the service suitable for different industries and cargo types.

All these combined features make RO-RO vessels an ideal choice for reliable and cost-effective maritime shipments, especially when handling large quantities of vehicles or industrial machinery.

Roll On Roll Off ships: different types

Roll On Roll Off ships are classified into different categories, each designed to meet specific transportation requirements according to cargo types. Let’s examine the main RO-RO ship variants.

PCC (Pure Car Carrier)

PCC vessels are specialized exclusively for transporting automobiles. They feature internal decks with optimized low heights suitable mainly for new or used cars. These ships provide high loading capacity, ensuring the safety and integrity of cars during transit, thanks to standardized and specialized fastening systems.

PCTC (Pure Car and Truck Carrier)

PCTC vessels represent an evolution of PCC ships, designed to carry both cars and larger commercial vehicles, such as trucks, buses, and trailers. Unlike PCCs, PCTCs feature adjustable internal decks, providing greater versatility and adaptability for vehicles of different sizes, enhancing efficiency and space utilization.

ROPAX (Roll On/Roll Off Passenger)

ROPAX vessels combine rolling cargo transport with passenger service, typically operating on short to medium routes. Besides accommodating vehicles and trucks, these ships have passenger areas, including cabins, lounge areas, and catering services. ROPAX ships are ideal for quick connections between nearby ports and islands, providing a comprehensive and practical solution for combined passenger and cargo traffic.

RoLo (Roll On Lift Off)

RoLo ships represent a hybrid solution between traditional RO-RO vessels and those equipped with cranes for vertical loading (LO-LO). These ships offer greater flexibility, handling both rolling cargo through integrated ramps and more complex cargo requiring vertical lifting, such as containers or specialized machinery. This combination makes them particularly valued in industries handling mixed or specialized cargo.

ConRO (Container Roll On Roll Off)

ConRO ships are specifically designed to combine RO-RO and containerized transport. Equipped with internal decks with dedicated ramps for rolling cargo and separate areas for containers, these ships meet complex and diverse requirements. ConRO vessels are particularly suitable for companies managing mixed logistic flows, optimizing shipments, and reducing overall transportation costs by combining different cargo types on a single vessel.

Each of these RO-RO ship variants offers tailored solutions to various international maritime transportation needs, enabling precise choices based on cargo type and shipment volume.

Maritime RO-RO transport: advantages offered

Choosing maritime RO-RO transport offers numerous benefits, making it particularly advantageous for international shipments of rolling cargo. Let’s examine the main advantages:

• Operational speed: RO-RO transport guarantees fast operational times due to easy and quick cargo loading and unloading directly via integrated ramps, eliminating the need for cranes or complex vertical handling systems;
• Optimized costs: reduced port dwell times and eliminating special equipment for vertical cargo handling significantly reduce operational costs, making RO-RO transport highly competitive economically;
• Enhanced cargo safety: horizontal cargo handling and specialized anchoring systems limit the number of cargo manipulations, significantly reducing the risk of accidental damage during loading, transit, and final unloading;
• Cargo versatility and flexibility: RO-RO ships allow simultaneous transport of various rolling cargo types, from simple vehicles to large industrial and agricultural machinery. This versatility enables rapid adaptation of transport logistics to various business needs;
• Reduced risk of accidents and damages: simplified and direct handling significantly reduces manual and mechanized operations, decreasing the incidence of accidents and damages.

These aspects make maritime RO-RO transport a reliable, cost-effective, and secure solution for efficiently managing international shipments of vehicles, machinery, and other rolling cargo.

Conclusion

RO-RO transport represents a highly efficient and secure solution for moving rolling cargo, vehicles, and machinery internationally. Opting for this transport mode means choosing speed, cost-effectiveness, and reliability. To fully capitalize on these opportunities, partnering with an experienced and reputable logistics provider is essential.

Savino Del Bene is a recognized specialist in international shipping. If you seek an efficient, safe, and punctual RO-RO service, consider entrusting your shipments to us. Contact your local Savino Del Bene representative today for tailored advice for your business.

Amsterdam, Netherlands & Florence, Italy – On May 3rd, 2025, the Balinese Hindu community in the Netherlands inaugurated their first temple. It was a spiritual and cultural milestone officiated by the Embassy of the Republic of Indonesia for the Kingdom of the Netherlands.

Behind this important celebration lies a story of dedication, coordination, and commitment from Savino Del Bene Netherlands, which was entrusted with the logistics of the temple’s construction materials from the very beginning in August 2023.

From Island Village to the Heart of Netherlands

Throughout this project, Savino Del Bene went above and beyond to provide excellent service and competitive pricing for our new client, the Embassy of the Republic of Indonesia. This was not your typical international shipment. It was a culturally significant and sensitive project that required care and flawless coordination.

We collaborated closely with our offices in Jakarta, Bali, and Surabaya to ensure a seamless process. Our involvement began at the artist’s workshop in a remote Balinese village, where intricately carved volcanic stone temple components were carefully packed and secured onto the pallets.

The carved stones were then transported via ferry from Bali’s port to Surabaya’s port of loading in East Java. We then managed the international shipment to Rotterdam, where Savino Del Bene Netherlands oversaw its completion. Upon arrival, the journey continued overland to the building site in Taman Indonesia Park in Kallenkote, which is located in the Overijssel province of the Netherlands.

Seeing it through

Due to the fragility and cultural importance of the temple materials, our team personally supervised the unloading process at the delivery site. This ensured that every piece arrived intact, ready to be assembled into what is now a landmark of spiritual and cultural pride.

Savino Del Bene was honored to be invited to the ceremony, on May 3rd, 2025, witnessing firsthand the traditional rituals.

More than Logistics

This project was far more than a complex shipment. It was a profound demonstration of our dedication to service and precision. It proved that logistics can play a key role in bridging nations and communities, if handled with utmost cultural respect. This project reflects the strong ties between the Indonesian and Dutch governments, culturally, economically, and diplomatically. We are proud to have played a role in transforming this carved stone into a monument of meaning.

Because behind every shipment there’s a story waiting to be shared.

In international trade, having clear and accurate documentation is essential for ensuring smooth operations and avoiding customs issues. One of the most commonly requested documents during the export or import of goods is the Certificate of Origin. This document, which identifies the country in which the goods were produced, plays a key role in determining customs duties, applying preferential trade agreements, and complying with local regulations.

In this article by Savino Del Bene, we explore in detail what a Certificate of Origin is, when it’s needed, how to obtain one, and how to complete it properly—offering practical examples and tips to avoid common mistakes.

What is a Certificate of Origin?

A Certificate of Origin (often abbreviated as CO or C/O) is an official document that certifies the country where a product was manufactured, processed, or substantially transformed. It confirms that the exported product was either entirely produced or significantly altered in a specific country.

Beyond identifying the commercial nationality of a product, the Certificate of Origin allows the importing country’s customs authorities to apply the correct tariffs based on existing bilateral or multilateral trade agreements. A properly issued certificate supports commercial transparency and helps prevent unfair practices like dumping.

Types of Certificates of Origin

There are two main types of Certificates of Origin, each serving different purposes: preferential and non-preferential.

Non-preferential Certificate of Origin

The non-preferential certificate is the most common type. It is typically required for statistical, labeling, or regulatory compliance in the importing country. It certifies the country of origin of the goods but does not grant any tariff advantages. It may also be required in cases involving embargoes, trade restrictions, or anti-dumping measures.

Preferential Certificate of Origin

A preferential certificate allows the exported goods to benefit from reduced or zero customs duties in the destination country, based on specific trade agreements. Notable examples include:

• EUR.1 or EUR-MED for trade with countries that have preferential agreements with the European Union;
• Form A, used under the Generalized System of Preferences (GSP).

This type of certificate requires that the goods meet the rules of preferential origin established by the specific agreement.

Key differences between preferential and non-preferential certificates

The main difference lies in customs treatment and trade agreements. A preferential certificate provides access to lower or zero tariffs under specific agreements and demands compliance with stricter origin rules. In contrast, a non-preferential certificate does not provide tariff benefits but is often necessary for regulatory or statistical purposes. Both types are essential and must be used appropriately, depending on the nature of the export and the regulations of the importing country.

When is a Certificate of Origin required and why?

A Certificate of Origin becomes necessary in many international transactions, although it is not always mandatory. Its requirement depends on the destination country, the type of goods being exported, and the applicable trade agreements. Understanding when it’s required is key to avoiding customs delays, fines, or blocked shipments.

A certificate is required when:

• The importing country mandates proof of origin to apply local regulations, restrictions, or security measures;
• The exporter wants to benefit from trade agreements that offer reduced or zero duties—in this case, a preferential certificate is necessary;
• A letter of credit explicitly mentions the certificate as a condition for payment;
• The importer requests it for fiscal, insurance, or contractual reasons;
• The goods are destined for countries subject to anti-dumping measures, embargoes, or trade sanctions, where proving origin is essential.

Though sometimes considered a formality, the Certificate of Origin for export is a critical document. It ensures product legitimacy, eases access to foreign markets, and avoids disruptions that could jeopardize entire shipments. For this reason, exporters should always check the destination country’s customs regulations and consider issuing the certificate even when it’s not explicitly required.

Who issues the Certificate of Origin and how to get one?

In the United States, a Certificate of Origin is typically issued by local Chambers of Commerce. Exporters can also use accredited service providers authorized to issue valid certificates. While U.S. Customs and Border Protection (CBP) does not directly issue Certificates of Origin, it may require them during customs clearance in the destination country.

How to get the Certificate of Origin: the procedure

The general process in the U.S. is as follows:

• Prepare all export-related documents (e.g., invoice, packing list);
• Access the Chamber’s online certificate platform (such as essCert or SWIFTcert);
• Fill out the form with exporter and consignee details, product description, HS Code, and invoice reference;
• Upload the supporting documentation;
• Submit the application for review;
• Upon approval, the certificate is issued digitally or in hard copy with the Chamber’s stamp.

Certificate of Origin of goods: procedures in EU and China

In many other parts of the world, the procedure is similar. In both the European Union and China, local Chambers of Commerce are the main authorities responsible for issuing Certificates of Origin.

Specifically, in China, there is also a special document known as Form E. This certificate confirms the origin of goods for shipments to ASEAN countries under a preferential agreement. To obtain Form E, goods must be entirely produced or substantially transformed in China, meeting the rules of origin defined in the relevant agreement. Like the standard certificate, Form E is issued by authorized chambers or trade authorities in China and is widely used for benefiting from preferential tariffs in Asian markets.

How to fill out a Certificate of Origin: example and guidelines

Filling out a Certificate of Origin requires attention to detail and familiarity with customs regulations. Any error, omission, or inconsistency with accompanying documents (like the invoice or bill of lading) can lead to customs delays or the denial of duty benefits. It is therefore essential to follow official guidelines.

How to fill out a certificate of origin: the data to be entered

A typical Certificate of Origin—preferential or not—includes:

• Exporter details: full name, address, and tax ID;
• Consignee (importer) details: name, address, and destination country;
• Product description: accurate and matching the invoice;
• HS Code (Harmonized System classification);
• Country of origin: where the goods were manufactured or significantly transformed;
• Quantity, packaging type, gross and net weight;
• Invoice reference: number, date, and value;
• Date, location, and exporter’s signature;
• Chamber of Commerce stamp and signature.

Example of a filled-out Certificate of Origin

Let’s consider a shipment of mechanical components from a U.S. company to a customer in Germany. The certificate might include:

• Exporter: American Gear Works Inc., 52 Industrial Drive, Houston, TX, USA;
• Consignee: Berlin Auto Components GmbH, Berliner Straße 19, Berlin, Germany;
• Goods description: Precision steel gears, diameter 150 mm, for automotive use;
• HS Code: 8483.10;
• Country of origin: United States;
• Quantity: 50 packages, 1,200 kg gross, 1,050 kg net;
• Invoice: No. INV-2025-045, dated 05/14/2025;
• Signature and stamp: by the exporter and the Houston Chamber of Commerce.

Keep in mind that some countries may require electronic forms or specific language versions. If you are applying for a preferential certificate, you might also need to attach a declaration of origin from the manufacturer.

Conclusion

The Certificate of Origin is a critical tool for ensuring compliance with international trade laws, benefiting from tariff reductions, and simplifying customs procedures. Whether preferential or non-preferential, understanding how it works and how to obtain one is essential for companies engaged in global trade.

To streamline your export documentation and customs clearance process, consider relying on the expertise of the Savino Del Bene team. Learn more about our customs services or contact your local Savino Del Bene representative directly for a tailored consultation for your business.

Incoterms® (International Commercial Terms) are standardized contractual clauses set by the International Chamber of Commerce (ICC) designed to regulate global trade. They play a crucial role in defining roles and responsibilities between seller and buyer in the contract for the sale and purchase of the goods.

In this article by Savino Del Bene, we will explore in detail what Incoterms® are, their function, and how they are classified, with specific insights into each term.

What is their purpose?

Incoterms® are drafted and published by the International Chamber of Commerce with the primary goal of facilitating global commercial practices by providing a common language that reduces misunderstanding between the parties.

Origins and evolution of Incoterms®

The inception of Incoterms® dates back to 1936 when the ICC (founded in Paris in 1919) recognized the need to standardize delivery terms used in commercial transactions to avoid misunderstandings and confusion due to different contractual clause interpretations in various countries. Since then, Incoterms® have been updated several times to adapt to the evolution of international trade. The present version, Incoterms® 2020, reflects these modern needs and newer trade practices.

The latest version of Incoterms® does not cancel the previous ones. If clearly stated in the contract, the parties, if they wish, could use a term of any previous version (even if the suggestion is to use the latest version).

Main role and functions of Incoterms®

The role of Incoterms® is of fundamental importance in international trade. They serve to:

• Define the allocation of responsibilities: Incoterms® precisely establish which obligations (who must organize carriage, just to give an example), risk (where and when the seller transfers risk to the buyer) and costs (who must pay the unloading costs, just to give an example) are borne by the seller and which by the buyer;
• Simplify communications: by providing standardized language, Incoterms® prevent misunderstandings and incorrect interpretations that can arise from linguistic and legal differences between countries;
• Facilitate contracts: the use of Incoterms® in international sales contracts helps parties clearly define delivery terms, making contract drafting and transaction management more straightforward;
• Optimize logistical processes: clarity on risk transfer and shipping tasks optimizes logistical planning, helping to reduce delays and confusion.

For companies engaged in international trade, understanding and correctly using Incoterms® is crucial for effectively managing the risk and costs associated with shipping goods. A proper choice of Incoterms® rule can not only prevent costly misunderstandings and disputes but also improve commercial relationships, ensuring that all parties have clear and achievable expectations regarding their responsibilities.

How many Incoterms® are there and how are they classified?

The Incoterms® 2020 are made up of 11 rules, each one divided in 10 articles (“A” articles concerning the seller’s obligations, “B” articles concerning the buyer’s obligations) grouped into two categories: 

• Rules for any mode or modes of transport (Ex Works, Free Carrier, Carriage Paid To, Carriage and Insurance Paid To, Delivered at Place, Delivered at Place Unloaded, Delivered Duty Paid);
• Rules for sea and inland waterway transport (Free Alongside Ship, Free on Board, Cost and Freight, Cost Insurance and Freight).

Each term has a corresponding three-letter acronym:

• Ex Works – EXW
• Free Carrier – FCA
• Carriage Paid To – CPT
• Carriage and Insurance Paid To – CIP
• Delivered at Place – DAP
• Delivered at Place Unloaded – DPU
• Delivered Duty Paid – DDP
• Free Alongside Ship – FAS
• Free On Board – FOB
• Cost and Freight – CFR
• Cost Insurance and Freight – CIF

The Incoterms® rules can also be divided in other ways; a way is by groups divided by the initial letter (E, F, C, and D):

• Group E: the seller delivers the goods before the transport cycle starts. From that moment on, the buyer takes on all the costs and risk.
• Group F: the seller delivers the goods before the main carriage that is paid by the buyer.
• Group C: the seller contracts and pays for the transport to bring the goods to the destination place or port of destination but the delivery happens before (as soon as the goods are handed over to the carrier or on board the vessel at the port of loading).
• Group D: the seller assumes the costs of the carriage and risk until the goods are delivered to the final destination.

It’s very important understand the importance of delivery that, for all Incoterms®, represents the passage of risk of loss of or damage to the goods from the seller to the buyer. The place of delivery should not be confused with the place of destination (only in Group D these two places match).

What are the Incoterms®?

After an overview of the four groups, let’s analyze the 11 Incoterms® more closely.

Incoterms® Group E: EXW

This group includes only EXW (Ex Works): with this term, the seller delivers the goods by placing them at the disposal of the buyer at a named place (seller’s premises or another agreed place like a factory or warehouse).

This term represents the option that places the least responsibility on the seller. It’s the only case in which there is not the obligation for the seller to carry out and pay for export clearance.

Incoterms® Group F: FCA, FAS, and FOB

Group F includes three terms:

• FCA (Free Carrier): the seller delivers the goods in one or other two ways: when the goods are loaded on the means of transport arranged by the buyer (if the named place is the seller’s premises) or when the goods, once loaded on the seller’s means of transport, reach the named place ready for unloading at the disposal of the carrier named by the buyer (if the named place is another than the seller’s premises);
• FAS (Free Alongside Ship): The seller delivers the goods by placing them alongside the ship (e.g. on a quay or a barge) at the named port of loading. The ship is nominated by the buyer; 
• FOB (Free On Board): The seller delivers the goods on board the vessel at the named port of loading. The vessel is nominated by the buyer.

Incoterms Group C: CPT, CIP, CFR and CIF

Group C includes four terms:

• CPT (Carriage Paid To): the seller delivers the goods by handing them over to the carrier. The carrier is contracted by the seller, that pays the transport up to the place of destination but the risk transfers to the buyer with the above mentioned delivery (before the main transport starts). In case of multiple carriers, in the absence of an agreement between the parties in the contract, delivery happens with the first carrier;
• CIP (Carriage and Insurance Paid To): same features of CPT, in addition the seller must obtain, at its own cost, a cargo insurance against the buyer’s risk of loss of or damage to the goods in compliance with the cover provided by Clauses A of the Institute Cargo Clauses (extensive cover) or any similar clauses;
• CFR (Cost and Freight): the seller delivers the goods on board the vessel at the port of loading. The seller must contract for the carriage to the port of destination but the risk transfers to the buyer with the above mentioned delivery (before the main transport starts). In case of multiple carriers, in the absence of an agreement between the parties in the contract, delivery happens with the first carrier;
• CIF (Cost Insurance and Freight): same features of CFR, in addition the seller must obtain, at its own cost, a cargo insurance against the buyer’s risk of loss of or damage to the goods in compliance with the cover provided by Clauses C of the Institute Cargo Clauses (minimum cover) or any similar clauses.

Incoterms Group D: DAP, DPU, and DDP

Group D includes three terms:

• DAP (Delivered At Place): the seller delivers the goods at the named place of destination by placing them at the disposal of the buyer on the arriving means of transport ready for unloading;
• DPU (Delivered at Place Unloaded): the seller delivers the goods at the named place of destination once unloaded from the arriving means of transport. It’s the only term that requires the seller to take care of unloading of the goods;
• DDP (Delivered Duty Paid): the seller delivers the goods at the named place of destination by placing them, already cleared for import, at the disposal of the buyer on the arriving means of transport ready for unloading. This term represents the maximum commitment for the seller. It’s the only case in which the seller must carry out and pay for import clearance.

For a complete summary, please refer to the Incoterms® table by Savino Del Bene.

Conclusion

In conclusion, Incoterms® are very important  tools that help international commerce, ensuring clarity in shipping industry. As an international freight forwarder, Savino Del Bene is here to assist all those companies needing support for the correct interpretation and application of these terms. Our goal, through our international shipping services, is to ensure that every business’s goods can travel safely and in compliance with regulations. Contact us now for a tailored consultation for your needs.