Incoterms Cost Impact Calculator
The Incoterms Cost Impact Calculator shows who pays for what under each Incoterms 2020 rule: enter your shipment's cost components and it splits origin charges, main freight, insurance, import duty, and destination charges between buyer and seller for the selected term, then totals each party's cost and the buyer's effective landed cost.
Input Parameters
Free On Board — seller covers origin costs and loading on the vessel; buyer pays from there. Sea/inland waterway only.
Export packing, inland transport to port, export clearance
Ocean/air carriage to the destination port or place
Only mandatory for the seller under CIF and CIP
Import clearance, duties, and taxes
Destination terminal handling and delivery to the buyer
Cost Split Under FOB
Enter the goods value to see the buyer/seller split
Formula
Buyer Effective Landed Cost = Goods Value + Σ(Buyer-Borne Cost Components under the selected Incoterm)Each Incoterms 2020 rule assigns responsibility for the legs of an international shipment. E terms (EXW) put nearly everything on the buyer; F terms (FCA, FOB) split at the main carriage; C terms (CFR, CIF, CPT, CIP) have the seller pay freight while risk transfers at origin; D terms (DAP, DPU, DDP) put most or all costs on the seller. The calculator applies the standard cost matrix so you can compare terms on equal footing — note that under C and D terms, seller-borne costs are normally built into the quoted goods price.
Variable Definitions
Incoterms 2020 Rule
The three-letter trade term agreed in the contract, which fixes the buyer/seller split.
Goods Value
The price of the goods themselves under the agreed term.
Cost Components
Origin/export charges, main freight, cargo insurance, import duty and customs, and destination charges.
Example Calculation
Scenario: A US importer buys machinery from Germany, goods value $80,000: - Origin & export charges: $1,200 · Main freight: $3,500 - Insurance: $400 · Import duty & customs: $2,400 · Destination charges: $1,100 Under FOB Hamburg: Seller pays: origin & export ($1,200) Buyer pays: freight + insurance + duty + destination = $7,400 Buyer effective landed cost = $80,000 + $7,400 = $87,400 Under DDP Chicago: Seller pays all $8,600 of charges (and will price them into the goods) Buyer's added cost = $0 beyond the (higher) DDP goods price. Same shipment, same total cost — the Incoterm decides who writes which checks and who carries the risk in between.
How to Interpret Your Result
• A lower goods price under EXW or FOB is not automatically cheaper — add the buyer-borne components before comparing against a CIF or DDP quote. • Cost responsibility and risk transfer are not the same thing: under C terms the seller pays freight but your risk starts when goods are loaded at origin. Insure accordingly. • Buyers with strong freight rates usually prefer F terms to control the main carriage; buyers who want simplicity buy DDP and pay for it in the goods price. • Under EXW, the buyer must handle export clearance in the seller's country — often impractical; FCA fixes this and is generally recommended instead.