Definition
ICC-published trade terms (EXW, FOB, CIF, DDP…) that define who pays and bears risk at each step.
Incoterms are a standardized set of three-letter rules from the International Chamber of Commerce that split costs, risk, and responsibility for transport, insurance, export/import clearance and delivery between buyer and seller.
Choosing the right Incoterm (e.g. FOB vs CIF vs DDP) determines where the forwarder’s scope begins and ends and who is exposed if cargo is lost or delayed.
Related terms
EXW (Ex Works)
The seller only makes the goods available at their premises; the buyer bears almost all cost and risk.
FOB (Free On Board)
The seller delivers, cleared for export, once the goods are on board the vessel at the named port.
CIF (Cost, Insurance and Freight)
The seller pays freight and minimum marine insurance to the destination port; risk still passes on loading.
DDP (Delivered Duty Paid)
The seller delivers to the buyer’s door with all costs, duties, and import clearance paid — maximum seller obligation.
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