Q: What is Incoterm conversion?
A: Changing the delivery term on a purchase or sales agreement (e.g., EXW → DDP) so responsibilities, risks, and cost allocation shift between buyer and seller. It affects who arranges freight, who handles export/import clearance, when risk transfers, and which costs are included in price. (Note: Incoterms govern delivery/risk—not title transfer or payment terms.)

 

Q: Why convert Incoterms?
A: To simplify operations, reduce landed cost, fix recurring bottlenecks, improve cash flow predictability, or align with customer capabilities (e.g., the buyer wants one delivered price instead of managing international legs).

 

Q: What are popular conversions you handle?
A:

• EXW → DDP: Seller takes full door-to-door responsibility, including export/import clearance and duties/taxes.

• FOB → DDP/DAP: Seller extends responsibility beyond port of loading to final delivery (DAP excludes import duties/taxes; DDP includes them).

• FCA → CIP/CIF: Seller adds carriage and insurance to named destination.

• CIF/CIP → DAP: Seller adds inland delivery beyond the arrival port, but buyer keeps import duties/taxes.

 

Q: What changes when we go from EXW/FOB to DDP?
A: Seller (or SOLO on your behalf) now: books international + inland transport, arranges export and import clearance, pays duties/taxes (DDP only), carries more risk until buyer’s site, and builds these costs into the unit price.

 

Q: What’s the difference between DAP and DDP?
A: DAP: Seller delivers to buyer’s named place, buyer pays duties, taxes, and import formalities.
DDP: Seller delivers and pays duties, taxes, and import formalities.

 

Q: Which Incoterms version do you use?
A: Incoterms® 2020 (ICC). We reference the term + named place precisely (e.g., “DAP – Detroit, MI Incoterms® 2020”).

 

Q: What info do you need to quote a conversion?
A:

• Origins/destinations, shipment frequency/forecast, weights & dims, packaging.

• Current term and target term (e.g., FOB Shanghai → DDP Detroit).

• Commodity/HTS codes, values, Incoterm place, required delivery windows.

• Customs data (supplier, COO, PGA requirements), insurance needs, compliance constraints (C-TPAT/FTZ/IMMEX).

 

Q: How do duties and taxes change under conversion?
A: Under DDP, the seller carries and recovers duties/taxes inside the price. Under DAP, buyer still pays them. We model landed-cost deltas so you can choose the most economical term.

 

Q: Will our price change?
A: Yes. Conversions shift cost ownership (freight, clearance, insurance, duties/taxes). We provide a transparent price build-up and, if desired, a dual-quote (e.g., DAP vs. DDP).

 

Q: What about insurance responsibilities?
A:

• CIP/CIF require seller-provided insurance to named destination (minimum cover under Incoterms).

• DAP/DDP do not require insurance, but the party carrying risk should insure. We can arrange cargo insurance aligned to the new risk point.

 

Q: Can you convert terms mid-program without disrupting supply?
A: Yes. We run a parallel plan: maintain current term for in-flight POs, apply the new term on future POs, and—if needed—bridge with temporary routing instructions while contracts are updated.

 

Q: What documents change during conversion?
A: Commercial invoice language (term + place), packing list references, shipper/consignee/notify party, broker instructions, insurance certificates (if CIP/CIF), and routing guides. We supply the templates.

 

Q: Do we need to change our customs broker when moving to DDP?
A: Often yes—the importer of record and broker authorization may change. We can act as or coordinate the broker, set up bonds/POA, and manage entries end-to-end.

 

Q: Can Incoterm conversion reduce total landed cost?
A: Frequently. Examples: weekly entry/MPF savings via FTZ, better consolidation on seller-controlled lanes, avoidance of origin dray bottlenecks, or duty deferral strategies. We’ll show a side-by-side landed-cost model.

 

Q: Common pitfalls to avoid?
A:

• Vague places (“FOB China” vs. “FOB Ningbo Port”).

• Assuming Incoterms set title/payment terms (they don’t).

• Missing import restrictions/PGA requirements under DDP.

• Under-insuring when risk point moves.

• Not updating contracts, POs, or ERP master data.

 

Q: Example: EXW Ningbo → DDP Detroit—what changes?
A: SOLO arranges pickup at supplier, export clearance in China, ocean/air, U.S. customs entry, duties/taxes, inland delivery to your door, and provides status, POD, and a single delivered price. Your team gets a predictable landed cost and less operational overhead.

 

Q: How fast can we switch?
A: Simple lanes: days. Multi-lane, multi-supplier programs: generally a few weeks. Timeline depends on data quality, broker setup, and systems updates.

 

Q: What if we want DAP instead of DDP?
A: DAP keeps import duties/taxes with the buyer (you retain control over tariff planning), while SOLO manages door delivery. It’s a good compromise when you want delivery simplicity but prefer to control customs cost strategy.

 

Q: Can you pilot the new term before a full rollout?
A: Yes—time-boxed pilots with clear KPIs (OTIF, cost variance, exception rate) to validate service and economics before scaling.