Shipping teaches people to follow rules, and rightly so.. We learn Incoterms® rules, customs procedures, bills of lading, letters of credit, port cut-offs, carrier instructions, internal SOPs, and compliance checks because the global trade ecosystem cannot run on guesswork..
But there is a gap I keep seeing in shipping, freight, logistics, and global trade, and that gap is “Following the Correct Rule vs Right Rule”..
A decision can be technically correct and still produce a poor outcome.. A correct decision follows the rule, the instruction, or the process.. A right decision fits the shipment, the transaction, the risk, and the commercial reality around it..
So which should it be..??
EXW in international trade
Take EXW – Ex Works, a valid Incoterms® 2020 rule.. When a buyer asks for EXW and the seller agrees, the rule itself may be correct.. The problem starts when the rule is used without checking whether it fits the transaction..
Under EXW, the seller places the goods at the buyer’s disposal, usually at the seller’s premises or another named place.. The seller does not have to load the goods on the collecting vehicle and does not have to clear the goods for export..
Now, if the trade is an international trade, a foreign buyer may have no customs registration in the seller’s country.. They may have no access to the export system, no tax standing, and no legal ability to act as exporter.. The entity listed as seller may also lose control over where the goods eventually go, which can create exposure around sanctions, export controls, tax records, and brand protection..
So yes, EXW is correct as a rule.. But for international shipments, it is not the right rule..
FOB versus FCA in container shipping
FOB has the same problem in container shipping.. FOB is valid, familiar, widely used, and still requested by many buyers.. That familiarity can be dangerous in container shipping, because in container shipping, the seller hands over the packed container at a terminal/port before it is loaded on board the vessel.. Once that container enters the terminal, the seller has limited control over what happens next..
The container may be moved, delayed, damaged, rolled, or affected by terminal operations before loading.. Under FOB, risk passes only when the goods are on board the vessel.. That creates a gap between the point at which the seller loses practical control and the point at which risk transfers under the rule.
FCA works better for container shipping because the seller can deliver the container to the carrier, or another nominated party, at the agreed place.. Risk can pass when the seller has actually performed the delivery action they can control.. FOB still has its place, but for containerised cargo, FCA reflects how the shipment actually moves.
Documentation decisions
Documentation has its own version of this problem.. A documentation clerk may receive shipping instructions from a customer and enter the details exactly as received.. That is correct because the instruction was followed..
But what happens when the consignee details look unusual..?? What happens when the notify party does not match the transaction..?? What happens when the cargo description is too vague, the HS code looks odd, or the letter of credit wording does not sit comfortably with the bill of lading instructions..??
The right action may be to pause before the document is issued.. A 10-minute question can prevent a 10-day delay.. Following instructions matters, but spotting risk before the document becomes evidence matters even more..
Training people to see the gap
Many trade problems do not come from people trying to make bad decisions.. They come from people completing the task without understanding the risk sitting behind the task..
The shipment moved, the document was issued, the freight option was selected, the rule was applied, and the file was closed.. Everything looked correct until the cost arrived, the claim landed, the cargo was held, or the customer asked the uncomfortable question..
Strong shipping, freight, logistics, and trade professionals do more than follow rules.. They understand why the rules exist, where the rule fits, and where the file needs a second look.. They know when to follow the process, when to challenge an instruction, when to escalate a concern, and when to ask whether the technically correct answer will still protect the business when the shipment meets reality..
That is the skill the industry needs more of.. Knowledge helps people do things correctly.. Understanding helps people make better decisions before the cost, delay, or dispute arrives..
At Shipping and Freight Academy (SAFA), we train people to understand the work behind the words and words behind the work.. Rules, documents, and procedures matter, but people also need to know how those rules, documents, and procedures behave inside real shipments, with real cargo, real deadlines, real money, and real consequences..
If your team needs to build capability in documentation, freight operations, cargo risk, trade execution, or decision-making across the shipment cycle, SAFA can help turn operational knowledge into better commercial judgment..