Understanding FOB, CIF, EXW, and DAP Incoterms

What are Incoterms?

Incoterms (International Commercial Terms) are standardized trade terms used in international contracts to define the responsibilities of buyers and sellers.

FOB (Free on Board)

The seller delivers the goods onto the vessel nominated by the buyer. The buyer bears all costs and risks from that point.

CIF (Cost, Insurance & Freight)

The seller arranges and pays for transportation to the destination port, including insurance coverage.

EXW (Ex Works)

The buyer is responsible for picking up the goods from the seller's premises and handling all shipping arrangements.

DAP (Delivered at Place)

The seller delivers the goods to a named destination, covering all costs up to that point.

Choosing the Right Incoterm

Consider your shipping experience, cost control, and risk tolerance when selecting Incoterms.

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