EXW, FOB, CIF or DAP: what each price actually includes

Free Carrier, you deliver cleared-for-export goods to the buyer's carrier at a named point, the modern container-world cousin of FOB. The workhorse term of door trades.

Risk passes to the buyer on loading even though the seller pays freight and insurance to destination, the classic CIF paradox everyone must learn once. Paying for the voyage is not suffering its risks.

By written amendment with price recalculation, the term change being an economic event, not a clerical one. Amend formally or quarrel informally, the market's choice.

Import duty and taxes at destination, which stay with the buyer unless expressly rolled into a DDP. The alphabet's last letter is customs' first.

Delivered At Place: you arrange and pay transport to the named destination, and the risk rides with you until arrival, while the buyer handles import clearance. DAP suits sellers who control the route, and it hands you every logistics problem between the gate and the drop as your own.

Ex-works or FCA for the first cargo: the buyer's forwarder does the moving, and you learn the trade without owning freight risks you have never priced. Step up to CIF or DAP once a route is routine, not on day one, whatever the buyer's charm.

Insurance: under both you pay cost and freight to destination, but CIF adds the marine insurance the seller must place. In bulk liquids the difference is usually one policy line, yet contracts still confuse them, and the letter of credit will not.

FOB means the seller delivers on board at a named load port and clears the goods for export; freight and insurance onward are the buyer's. CIF is the same delivery point with the seller additionally paying sea freight and marine insurance to a named discharge port. The catch is that risk passes at loading under both: CIF does not mean the seller carries the cargo until it arrives.

Inland transport to the port, loading, export clearance and documents, terminal handling at the load port, and any storage in between. There is no fixed percentage: it moves with the route, the parcel size and whether the cargo goes bulk, in ISO tanks or in flexitanks, and those three have very different cost structures.

It includes the material, getting it on board, export clearance, sea freight to the named port and marine insurance, normally at 110 per cent of invoice value. It does not include discharge, import duty, customs clearance, onward transport, storage on arrival, or demurrage. Those are the buyer's unless the contract says otherwise.

Because Amsterdam, Rotterdam and Antwerp is where European demand and tank infrastructure concentrate, and where the published price assessments are set. It gives two parties in different countries one reference they both recognise. A seller usually starts from an origin basis instead, and the gap between the two numbers is freight, insurance and the cost of reaching the ship.

Whoever exceeded the time the contract allowed, at the rate the contract names. On a bulk vessel that is governed by laytime and the notice of readiness; on containers and ISO tanks it shows up as terminal detention and demurrage, accruing per unit per day and invoiced afterwards. Fix the allowance, the start of the clock, what stops it and the rate before loading, because a contract that is silent on those will surprise somebody.

Usually the party appointing pays, frequently split between the two, with the load port and discharge surveys as separate appointments. What matters more than the split is that both sides accept the surveyor before the cargo moves and that sealed retained samples are kept. A dispute where each side has its own laboratory result and no agreed retained sample has no referee.

Not without adding the freight and insurance for that specific route and parcel, and not without naming the discharge port. Passing an FOB number on as CIF is one of the commonest ways a trade unravels three emails later. If you are unsure what the carriage costs on that route, ask before you quote rather than after.

No, and treating them as one thing causes real disputes. The delivery term decides where risk and cost pass. Where quality is determined, at load, at discharge, or on a retained sample, is a separate contractual clause. A contract can pass risk at loading and still determine quality at discharge, and both need to be written down.

For these cargoes typically the bill of lading, commercial invoice, packing list, certificate of analysis and the sustainability declaration, plus whatever else the credit names. The whole point is that the documents must match the credit exactly, so the list has to be agreed before loading. Most payment disputes start with a document nobody named in advance.

Whichever one the contract names, which is why it should name one. If your counterparty writes only "CIF" with no year and no named port, that is worth settling in one email now rather than in a dispute later. The authoritative text is published by the International Chamber of Commerce.