Guides / Choosing a Supplier

International Shipping and Incoterms for Swiss Machined Parts

September 21, 2026

Shipping terms rarely get the attention they deserve on a Swiss machining order until something goes wrong: a shipment stuck in customs, an unexpected duty bill, or confusion about who was responsible for insurance on a shipment that arrived damaged. Agreeing the shipping terms and Incoterm clearly before the first order avoids most of this.

What Incoterms actually do

Incoterms are a standard set of terms, published and updated periodically by the International Chamber of Commerce, that define exactly who is responsible for shipping, insurance, customs clearance and risk of loss at each stage of a shipment’s journey from seller to buyer. They exist specifically to remove ambiguity in international trade, where “the shop ships it and I pay for shipping” can mean several genuinely different arrangements depending on what exactly each party is responsible for and at what point.

Using a defined Incoterm, and confirming both parties are working from the same version of the terms since they are periodically updated, replaces a vague verbal understanding with a specific, checkable agreement.

The terms you will most commonly encounter

EXW, Ex Works. The buyer takes responsibility for the goods at the seller’s dock and handles all shipping, export clearance, import clearance and duties from that point. This gives the buyer the most control and usually the lowest quoted product price, at the cost of managing the entire logistics chain, either directly or through your own freight forwarder.

FOB, Free On Board (used for sea freight, with related terms for other transport modes). The seller delivers the goods to a named port or carrier and handles export clearance, after which responsibility transfers to the buyer for the remaining transit, import clearance and duties.

DAP, Delivered At Place. The seller handles transit to a named destination, with the buyer responsible for import clearance and duties once the goods arrive.

DDP, Delivered Duty Paid. The seller handles everything, including import clearance and duties, delivering the goods ready to receive at your dock. This is the most complete service and typically carries the highest quoted price, since it bundles all the shipping and duty cost the seller is fronting into the number you see.

Which term fits your situation

If you have an established freight forwarder and customs broker relationship and want the most control over cost, EXW or FOB gives you that control at the cost of managing more of the logistics chain yourself.

If you want simplicity and are willing to pay for it, DDP removes nearly all the logistics and customs burden from your side, at a price that reflects the seller taking on that responsibility and risk.

Many buyers land somewhere in the middle, particularly DAP, where the supplier handles the complex international transit and the buyer handles the more familiar domestic import clearance step.

There is no universally correct choice. The right term depends on your own logistics capability, how much control you want over shipping cost, and how much complexity you are willing to manage directly versus pay someone else to handle.

Duties and tariffs

Duties and tariffs depend on your product’s classification, the countries of origin and destination, and current trade policy between them, which changes over time and is worth confirming for your specific situation rather than assuming based on general knowledge. This is a question for a customs broker or your own trade compliance function rather than the machine shop, though the shop should be able to tell you the country of origin and the tariff classification code, commonly the Harmonized System or HS code, that applies to the part.

Confirm before ordering:

• Which party is responsible for duties under the agreed Incoterm
• The applicable tariff classification, since misclassification can cause customs delays or incorrect duty assessment
• Whether any trade agreement between the relevant countries reduces or eliminates duties on your product category

Payment terms are separate from Incoterms

Incoterms cover shipping, risk and customs responsibility. They do not cover when or how you pay for the goods, which is a separate agreement worth settling explicitly. Common arrangements include payment in advance, particularly for a first order with a new supplier, and net terms such as net 30 or net 60 once a payment history is established.

Currency also matters here, covered in the total cost of ownership guide: paying in a foreign currency exposes you to exchange rate movement between the time you commit to an order and the time payment is actually due, which can meaningfully affect the real cost of a large order placed well in advance of payment.

What to agree before the first order

1. The specific Incoterm, by name and by the version of the Incoterms rules both parties are using
2. Which party arranges freight and insurance, and who is responsible for the goods at each stage of transit
3. Duty and tariff responsibility, and the applicable tariff classification
4. Payment terms and currency, agreed separately from the shipping terms
5. What happens if a shipment is delayed, damaged or lost in transit, and whose insurance covers it

Documentation

International shipments typically need a commercial invoice, a packing list, and depending on the goods and countries involved, a certificate of origin or other supporting documentation for customs clearance. Confirm early what documentation the shop will provide and in what format, since missing or incorrect paperwork is a common and avoidable cause of a shipment held up in customs despite otherwise being ready and on time.

A worked EXW versus DDP comparison

Consider two quotes for the same order of Swiss machined connector housings, one quoted EXW and one quoted DDP, from shops in the same region with similar part prices before shipping terms are added.

Under the EXW quote, you take responsibility for the goods at the shop’s dock. Working through the total cost, covered in more depth in the total cost of ownership guide, means adding your own freight forwarder’s quoted rate, export and import clearance fees, and the applicable duty on your product’s tariff classification. If you already have an established freight forwarder relationship with competitive rates, this often comes out favorably, since you are not paying for the shop’s markup on logistics services it is not itself specialized in providing.

Under the DDP quote, the shop’s price already includes all of this, delivered to your dock with duties paid. The quoted price is higher, but it reflects the shop’s own freight and duty costs, marked up by whatever margin the shop applies for taking on this responsibility and risk on your behalf.

Which one actually costs less depends on how favorable your own freight and customs rates are compared with what the shop can arrange, and how much you value not having to manage the logistics chain directly. A buyer with strong existing freight relationships and in-house customs expertise often finds EXW cheaper in total. A buyer without that infrastructure, particularly ordering occasionally rather than on a large recurring basis, often finds DDP’s simplicity worth its higher quoted price once the alternative, building out logistics capability for an occasional order, is fairly counted.

Neither term is universally better. Running the comparison with real numbers for your specific situation, the same discipline covered in the total cost of ownership guide, is what actually answers the question for your order.

Common shipping mistakes and how to avoid them

A handful of avoidable mistakes account for most of the shipping problems that catch buyers by surprise on an otherwise well managed Swiss machining order.

Assuming an Incoterm without confirming it explicitly. A verbal or implied understanding of who handles what is not the same as an agreed Incoterm, and mismatched assumptions between buyer and seller about shipping responsibility are a common, entirely avoidable source of dispute once a shipment is actually moving.

Not confirming the tariff classification in advance. Discovering your product’s Harmonized System classification only when customs flags a shipment is a preventable delay. Confirming the classification before the first order ships lets you plan duty cost into your total cost comparison from the start, covered in the total cost of ownership guide, rather than discovering it as a surprise.

Underestimating customs clearance time in the schedule. Customs clearance adds time beyond pure transit time, and treating a shipment as arrived the moment it lands rather than the moment it clears customs and reaches your dock is a common scheduling error, one more factor in the lead time planning covered in the lead time guide.

Missing or incorrect documentation. A commercial invoice with a mismatched value, a missing certificate of origin where one is required, or paperwork that does not match the actual shipment contents are common, avoidable causes of a customs hold. Confirming documentation requirements with the shop before the first shipment, rather than after a delay, prevents most of this.

Not agreeing payment terms separately from shipping terms. As covered earlier, an Incoterm says nothing about when or how you pay. Leaving payment terms as an unstated assumption, rather than an explicit agreement alongside the Incoterm, is a common source of friction that a short conversation at the start of the relationship easily prevents.

The shipping rule is one of the quote terms in our guide to the Swiss machining quote.

Getting terms agreed up front

Send your drawing through the RFQ form and raise your preferred Incoterm and any logistics constraints as part of the RFQ. We match your part with up to three shops that run Swiss-type lathes and reply within 24 business hours, and settling shipping terms alongside price and lead time avoids a surprise once parts are ready to ship.

See also: what US buyers check on imported Swiss turned parts, as of October 2026.

Frequently asked questions

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