Structured trade knowledge covering terms, processes, regulations, and practice.
Under FOB, the seller delivers when goods pass the ship's rail at the named port of shipment; risk transfers to the buyer at that point.
FOB ends seller duty at loading on board; CIF adds main freight and marine insurance paid by the seller to the named port.
Under CIF the seller pays cost, main carriage freight, and minimum marine insurance to the named port of destination; risk passes on loading at origin.
Under EXW the seller makes goods available at their premises; the buyer bears virtually all transport and export risks from that point.
FCA delivers goods to the carrier or person nominated by the buyer at the named place — suitable for all transport modes including air.
CPT seller pays freight to named destination; risk passes when goods are delivered to first carrier.
CIP adds insurance to CPT — seller pays freight and insurance to destination; risk at first carrier.
DAP seller delivers goods ready for unloading at named place; buyer handles import clearance.
DPU seller delivers and unloads at named place; replaced DAT in Incoterms 2020.
DDP seller delivers cleared for import at destination — maximum seller obligation.
CFR seller pays freight to destination port; buyer insures from loading; risk on board at origin.
EXW leaves export and loading to the buyer; FOB adds seller export clearance and loading on board at the port.
CFR seller pays freight only; CIF seller pays freight plus minimum insurance to destination port.
FOB price equals product cost plus all seller-side charges up to loading on board at the named port.
Incoterms® 2020 has 11 rules in four groups — EXW; FCA/FAS/FOB; CFR/CIF/CPT/CIP; DAP/DPU/DDP — defining delivery and risk.
Under FOB, loss or damage risk passes to the buyer when goods are on board the vessel at the named port of shipment.