Incoterms Explained (FOB, CIF, EXW, DDU) for Importing Custom Parts
When you import custom parts, the quote depends heavily on the Incoterm. These standard trade terms define who arranges and pays for transport, insurance, and customs — and where risk passes from seller to buyer. Here are the ones you'll see most.
EXW (Ex Works)
The seller makes the goods available at their factory; you handle everything from there — export clearance, freight, insurance, and import. Lowest seller price, most work and risk for you. Best when you have a freight forwarder you trust.
FOB (Free On Board)
The seller delivers the goods, cleared for export, onto the ship at the origin port. From that point, freight and risk are yours. It's the most common term for sea freight — a clear, widely understood split of responsibility.
CIF (Cost, Insurance and Freight)
The seller pays freight and insurance to the destination port, though risk still passes to you once the goods are on board at origin. Convenient if you'd rather the seller arrange shipping to your port.
DDU / DAP (Delivered Duty Unpaid / Delivered at Place)
The seller delivers to your destination, and you handle import duties and taxes. More convenient for you, but you still clear customs. DDU is the older term; DAP is the modern equivalent.
Which to choose
- EXW — you have strong logistics and want maximum control
- FOB — the standard, balanced choice for sea freight
- CIF — you want the seller to handle shipping to your port
- DAP / DDU — you want delivery to your door but will handle duties
A note on comparing quotes
Always confirm which Incoterm a quote uses — an FOB price and a CIF price are not comparable. Ask what's included and where your responsibility starts.
Frequently asked questions
What's the most common Incoterm for sea freight?
FOB — a clear, widely used split of responsibility for ocean shipments.
Does CIF cover me all the way to my door?
No — CIF covers freight and insurance to the destination port, not inland delivery or import duties.
Who clears customs on import?
Except for delivered terms, the buyer handles import customs and duties.
Related reading
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