Incoterms are standard trade terms that split transport costs, duties and risk between buyer and seller. They do not replace the sales contract.
Three terms to know
- EXW: the buyer collects at the seller’s premises.
- FOB: the seller delivers on board the vessel at the named port.
- CIF: the seller pays freight and insurance to the destination port, but risk passes on board.
Choose the term that matches who can arrange transport and insurance. Write the named port or place, and make sure the invoice, packing list and transport document agree.