The Incoterms Trap: Why Many UK Exporters Are Paying Duties They Didn’t Expect

Incoterms are designed to clarify who pays for what in international trade, but in today’s volatile environment they are exposing costly assumptions. Sudden tariff changes, fluctuating freight costs, and stricter customs enforcement are revealing gaps in contracts many exporters thought were settled. The result is unexpected bills for duties, VAT, storage, or delays that someone assumed the other party would cover.

Delivered Duty Paid (DDP) is a common source of problems. While attractive to customers, DDP places nearly all risk on the seller. When tariffs shift quickly, exporters may find themselves absorbing new import duties that were never priced into the deal. Combined with the need to navigate foreign tax and customs systems, DDP can turn from a commercial advantage into a margin-draining liability.

At the other end of the spectrum, EXW and FCA terms often fail due to unclear allocation of responsibilities. Sellers may assume their role ends once goods leave the warehouse, while buyers expect assistance with export formalities. When these assumptions clash, paperwork goes unfiled, shipments stall, and costs escalate through delays and storage fees.

Volatility has made these weaknesses harder to ignore. An Incoterm that once worked smoothly can suddenly shift major costs onto an unprepared party if tariffs rise or enforcement tightens. Buyers may delay collection, sellers may face unpaid charges, and goods can end up stuck in limbo.

Incoterms are not “set and forget.” UK exporters should revisit them regularly, test contracts against adverse scenarios, and add safeguards for sudden policy or cost changes. The right choice will not eliminate risk, but it will ensure surprises do not end up on your balance sheet.