INCOTERMS® 2020: EXW, FOB, CIF and DDP
A concise guide to four commonly discussed delivery terms.
EXW — Ex Works
The seller makes the goods available at the named place. The buyer takes on most transport responsibilities; practical export-clearance arrangements should be agreed clearly.
FOB — Free On Board
For sea and inland-waterway transport. The seller delivers the goods on board at the named port of shipment; risk transfers there.
CIF — Cost, Insurance and Freight
The seller pays freight and specified insurance to the destination port, while risk transfers when the goods are placed on board at origin.
DDP — Delivered Duty Paid
The seller delivers at the named destination after handling import formalities and duties. The seller’s ability to act as importer should be checked locally.
Name the exact place
Write the term with the named place or port and edition, for example “FOB Shanghai, Incoterms® 2020”. Payment, ownership, acceptance and disputes need separate contract clauses.