EXW
Ex Works — buyer collects
The buyer collects from the seller's premises and carries almost all cost and risk from that point. It suits buyers who already have a forwarder and want full control of routing.
Seller: packing only
Incoterms & landed cost · Belgium trade guide
Incoterms and how landed cost adds up
A working guide for importers and exporters moving goods into and out of Belgium. It explains the standard trade terms, who pays for each stage, and the charges — freight, duty, import VAT, handling — that decide what a shipment really costs at your door.
Guide only, not a contract · Written for Belgian importers and exporters
Two questions decide what a shipment costs
Who is responsible for each stage of the journey, and which charges land on your invoice. Incoterms answer the first. Landed cost answers the second. Both are agreed long before a container is loaded, which is why they are worth an hour of attention up front.
What Incoterms are
Incoterms are standardized trade terms published by the International Chamber of Commerce. They define who arranges and pays for each stage of a shipment, and at what point risk passes from seller to buyer. They do not set the price of the goods, and they do not override the contract between the parties.
Their value is that both sides can use the same three-letter term and mean the same thing, which removes a lot of ambiguity from cross-border deals. The current edition is revised every ten years, so a contract that names the version avoids arguments later.
The short version
A shared vocabulary for who does what, where risk moves, and who files the papers.
Nothing about the price of the goods changes when you change the term. What changes is the list of tasks and the list of invoices each side carries.
The terms you will meet most often
Five terms cover most European trade lanes. Each one shifts the balance of cost and risk a little further toward the seller as you read down the list. Compare them against the way you actually buy or sell before you pick one.
FOB
Free On Board — seller to the port
The seller delivers to the port of shipment and loads the vessel; the buyer takes over from there. Risk passes when the goods are on board, which keeps the ocean leg in the buyer's hands.
Risk: on board
CIF
Cost, Insurance, Freight — seller pays to the port
The seller pays freight and insurance to the destination port, but risk passes earlier — at the port of shipment. That gap between paying and being at risk catches people out.
Risk: at origin port
DAP
Delivered At Place — buyer clears import
The seller delivers to a named place, with the buyer handling import duties and VAT. Name the place precisely — a city is not an address, and the last few kilometres often decide the argument.
Import: buyer
DDP
Delivered Duty Paid — seller handles everything
The seller handles everything including import clearance, duty and VAT. It reads as the simplest offer for the customer, and it asks the most of the seller's customs setup.
Import: seller
Choosing a term that fits
The right term depends on who is better placed to arrange transport and clearance. Match it to your setup, not to habit.
You already have a forwarder
A buyer with an established forwarder may prefer EXW or FOB so they control the routing, the carrier choice and the transit time. You keep the booking, you keep the schedule.
Typical fit · EXW · FOB
You want to simplify the purchase
A seller with a reliable logistics partner may offer DAP or DDP so the customer sees one price and one delivery promise instead of a list of charges to assemble.
Typical fit · DAP · DDP
Your customer is not VAT-registered
Private buyers and non-registered businesses cannot reclaim import VAT, so a DDP offer is often the cleaner conversation. It moves the customs paperwork to the side that already knows how to file it.
Typical fit · DDP
You ship the same lane every month
Regular volume rewards one agreed term written into a framework contract, with the named place and the Incoterms edition spelled out. Repeat lanes are where a copied term costs the most.
Typical fit · written agreement
What landed cost includes
Landed cost is the total you pay to get goods to their final destination. Estimating it properly means adding every line below rather than looking at the freight quote alone — the freight quote is usually the smallest surprise.
- Goods
- The supplier's price for the goods themselves — the number most quotes start and stop at.
- Freight
- The charge for moving the consignment by air, ocean or road, plus fuel and any peak-season surcharge.
- Insurance
- Cargo cover for the transit leg, if applicable. It also counts toward the customs value.
- Customs duty
- Calculated on the customs value of the goods, generally the price paid plus transport and insurance to the point of entry.
- Import VAT
- Charged on the customs value plus the duty. Often recoverable for VAT-registered businesses, but still payable or accounted for on entry.
- Handling & storage
- Terminal handling at the port, documentation fees, warehousing, and last-mile delivery to the final address.
- Delay
- Storage and demurrage when a shipment sits waiting on paperwork. Easy to forget, expensive to learn.
Duties and import VAT
Customs duty is calculated on the customs value of the goods, which is generally the price paid plus transport and insurance to the point of entry. Import VAT is then calculated on the customs value plus the duty.
The duty rate depends on the HS code of the product, which is why classification matters financially. A code that describes the wrong material or the wrong end use can move the rate, and the difference shows up on every future shipment on the same lane.
For VAT-registered businesses, import VAT is often recoverable, but it still has to be paid or accounted for when the goods enter. Cash flow matters as much as the rate here.
Customs & DocumentationWhen bonded storage changes the calculation
Bonded warehousing allows goods to be stored before duties and import VAT become payable. That can shift the timing of the cost, which matters if you are importing in bulk and releasing stock gradually.
It also gives you more control over when the tax point falls. It does not remove the charges, but it can make a large import more manageable. The decision depends on your cash flow and your delivery schedule — if stock turns slowly, a bonded arrangement often earns its keep; if it turns in weeks, the extra handling may not.
Held
Stored before duty is due
Goods sit under customs control. No duty, no import VAT yet, and stock is not released for sale.
Declared
Released in the quantity you need
You declare the portion leaving the warehouse. Duty and import VAT fall on that portion only, when it is released.
Cleared
Free to sell or deliver
Once the declaration is settled the goods move to your control. The paperwork trail stays with the consignment.
Timing shifts the tax point · the charge itself does not disappear
Estimating before you commit
A practical way to estimate landed cost is to work through four figures in order. Each one feeds the next, so a mistake early on compounds.
1
Start from the supplier price
Take the invoice value of the goods as your base. Everything else is added on top of this figure, so it has to be right first.
2
Add freight and insurance
Add the freight charge and cargo insurance to the point of entry. Together these give you the customs value the duty is calculated on.
3
Apply the duty rate for the HS code
Look up the rate that applies to the classification of your product, then add import VAT on the combined figure of value plus duty.
4
Add handling, storage and last mile
Finally add terminal handling, documentation, any storage, and delivery to the final address. This is the figure your margin actually works against.
If you are unsure of the duty rate, ask before you order rather than after the goods arrive. A few minutes of checking is cheaper than a surprise invoice, and a wrong HS code repeats on every future shipment on the same lane.
Where responsibility usually goes wrong
Most problems come from an unclear Incoterm or from assuming a term covers something it does not. These are the four situations we see most often.
The buyer expected DDP but the contract said DAP
Under DAP the buyer handles import clearance, duty and VAT. If the buyer is not set up for that, the consignment can sit at the border while someone files the declaration. Writing DDP into the contract, or arranging a customs agent before departure, avoids the wait.
The seller thought CIF meant the goods were covered to the door
CIF means the seller pays freight and insurance to the destination port, but risk passes at the port of shipment. The seller's job is done on paper long before the vessel arrives. The insurance cover is also minimum-scope unless the contract asks for more.
Nobody named the exact delivery place
DAP and DDP both require a named place. A city or a port is not enough — the address, and often the specific gate or loading bay, decides where the seller's responsibility ends and the buyer's begins. The last few kilometres are where disputes live.
An old contract was reused with an outdated edition
Incoterms are revised roughly every ten years. A term copied from a template written under an earlier edition may allocate a task differently than either party expects. Write the term, the named place and the edition into the contract explicitly, and confirm who is filing the customs declaration.
Lane · Belgium ↔ EU
Mode · air · ocean · road
Terms · EXW to DDP
Cost basis · freight + duty + import VAT
Agree the term and the number before the goods move
A five-minute conversation about Incoterms and the landed cost basis saves the invoice argument three weeks later. If you are importing into Belgium or exporting from it, bring us the lane, the goods and the term you have in mind — we will tell you what the figures are likely to look like.