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Incoterms Comparison Tool

Compare EXW, FCA, FOB, CFR, CIF, DAP and DDP in simple language. Learn who pays freight, who handles customs, and where risk transfers.

Important: This tool is designed for educational purposes and shipment planning guidance. Always confirm Incoterms with your freight forwarder or trade advisor before booking cargo.
COMPARISON TOOL

Compare Two Incoterms

Select two Incoterms and see the main difference in cost, risk, customs responsibility and transport mode.

Select two Incoterms to compare responsibilities side by side.

GUIDANCE TOOL

Help Me Choose the Right Incoterm

Answer a few simple questions and get a basic Incoterm suggestion for your shipment.

Responsibility Visualizer

Select an Incoterm to see who is mainly responsible at each shipment stage.

What Are Incoterms?

Incoterms are international trade terms used in shipping and logistics. They explain the responsibilities of buyers and sellers, including freight cost, insurance, customs clearance, risk transfer and delivery point.

Incoterms Quick Comparison Table

Incoterm Best For Freight Paid By Insurance Import Duty Mode
EXW Experienced buyers Buyer Buyer Buyer Any Mode
FCA Air and multimodal shipments Buyer Buyer Buyer Any Mode
FOB Sea freight Buyer Buyer Buyer Sea Only
CFR Sea freight where seller arranges freight Seller Buyer Buyer Sea Only
CIF Sea freight with seller-arranged insurance Seller Seller Buyer Sea Only
DAP Door delivery excluding import duty Seller Optional Buyer Any Mode
DDP Complete seller responsibility Seller Optional Seller Any Mode

Common Incoterms Mistakes

Using FOB for Air Freight

FOB is linked with goods being loaded on board a vessel. For air freight, FCA is usually a better and clearer option.

Assuming CIF Includes Import Duty

CIF includes cost, insurance and freight to the destination port, but import duty, customs charges and local delivery are usually handled by the buyer.

Choosing EXW Without Understanding Export Clearance

EXW gives most responsibility to the buyer. It may create problems if the buyer cannot handle export procedures in the seller’s country.

Frequently Asked Questions About Incoterms

What is FOB in shipping?

FOB (Free On Board) means the seller is responsible for delivering and loading the cargo onto the vessel. Once the cargo is loaded, the buyer takes responsibility for ocean freight, insurance, and destination charges.

What is CIF in shipping?

CIF (Cost, Insurance and Freight) means the seller pays for freight and insurance up to the destination port. The buyer is usually responsible for import clearance, customs duty, and local delivery.

What is the difference between FOB and CIF?

Under FOB, the buyer arranges freight and insurance. Under CIF, the seller arranges and pays for freight and insurance to the destination port.

Which Incoterm is best for air freight?

FCA (Free Carrier) is generally the preferred Incoterm for air freight because it clearly defines when responsibility transfers from seller to buyer.

Does CIF include customs duty?

No. CIF usually includes cost, insurance, and freight to the destination port, but import customs clearance, taxes, and duties are normally handled by the buyer.

What is DDP in shipping?

DDP (Delivered Duty Paid) means the seller takes maximum responsibility and usually pays freight, import clearance costs, taxes, and customs duties until the cargo reaches the buyer.

Is DDP better than FOB?

Neither is always better. DDP is convenient for buyers because the seller handles most of the shipment. FOB is often preferred when buyers want more control over freight arrangements.

Can FOB be used for air freight?

FOB is designed for sea freight shipments. For air freight, FCA is usually the recommended Incoterm.

Disclaimer

This tool is for learning and general shipment guidance only. Always confirm Incoterms, responsibilities, charges and risk points with your freight forwarder, buyer, seller or trade advisor before finalizing a shipment.

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LEARN INCOTERMS

Quick Incoterms Guide

FOB - Free On Board

Simple Meaning: The seller delivers and loads the cargo onto the vessel. Once loaded, responsibility transfers to the buyer.

Best Used For: Sea freight shipments where the buyer wants control over international freight.

Buyer Responsibility: Ocean freight, insurance, destination charges, customs clearance, and delivery after shipment.

Seller Responsibility: Export clearance and loading the cargo onto the vessel.

Common Mistake: Using FOB for air freight. FCA is usually more appropriate for air shipments.

Real Example: A buyer in Pakistan purchases goods from China under FOB Shanghai. The supplier loads the cargo onto the vessel, while the buyer arranges ocean freight through their freight forwarder.

CIF - Cost, Insurance and Freight

Simple Meaning: The seller pays freight and insurance up to the destination port.

Best Used For: Buyers who want the seller to arrange transportation to the destination port.

Buyer Responsibility: Import customs clearance, taxes, duties, and local delivery.

Seller Responsibility: Export clearance, freight, and insurance up to the destination port.

Common Mistake: Assuming CIF includes customs duty and door delivery.

Real Example: A Karachi importer buys goods under CIF Karachi. The supplier arranges freight and insurance, but the importer still pays customs duty and local charges.

EXW - Ex Works

Simple Meaning: EXW (Ex Works) means the seller makes the goods available at their factory or warehouse, and the buyer takes responsibility from that point onward.

Best Used For: Experienced importers who have freight forwarders and customs agents in the seller's country.

Buyer Responsibility: Cargo pickup, export clearance, freight, insurance, customs clearance, import duty, taxes, and final delivery.

Seller Responsibility: Prepare the goods and make them available for collection at the agreed location.

Common Mistake: Buyers choose EXW because the product price appears lower, but later discover they must manage export procedures and local logistics in a foreign country.

Real Example: A buyer in Pakistan purchases machinery from Germany under EXW Hamburg. The supplier makes the cargo available at their warehouse, while the buyer arranges pickup, export clearance, ocean freight, customs clearance, and delivery.

FCA - Free Carrier

Simple Meaning: FCA (Free Carrier) means the seller delivers the cargo to a carrier or agreed location and completes export clearance.

Best Used For: Air freight, courier shipments, and multimodal transportation.

Buyer Responsibility: Main freight, insurance, destination charges, import customs clearance, and delivery.

Seller Responsibility: Export customs clearance and delivery to the agreed carrier or handover point.

Common Mistake: Using FOB for air freight when FCA is usually the correct Incoterm.

Real Example: A supplier in China delivers cargo to the airline cargo terminal under FCA Shanghai Airport. The buyer arranges the air freight and destination handling.

CFR - Cost and Freight

Simple Meaning: CFR (Cost and Freight) means the seller pays ocean freight to the destination port, but cargo insurance remains the buyer's responsibility.

Best Used For: Sea freight shipments where the seller can arrange competitive freight rates.

Buyer Responsibility: Insurance, import customs clearance, duties, destination charges, and local delivery.

Seller Responsibility: Export clearance and ocean freight to the destination port.

Common Mistake: Assuming the seller also provides insurance under CFR.

Real Example: A supplier in Vietnam sells goods under CFR Karachi. The supplier pays ocean freight to Karachi Port, while the importer arranges insurance and customs clearance.

DAP - Delivered At Place

Simple Meaning: DAP (Delivered At Place) means the seller delivers the cargo to the agreed destination, but the buyer handles import customs clearance and duties.

Best Used For: Door delivery shipments where the seller can arrange transportation but not import formalities.

Buyer Responsibility: Import customs clearance, duties, taxes, and regulatory requirements.

Seller Responsibility: Transportation to the agreed destination point.

Common Mistake: Assuming DAP includes customs duties and taxes.

Real Example: A supplier in Turkey ships goods to a buyer's warehouse in Karachi under DAP. The supplier arranges transportation, while the buyer pays import duty and clears customs.

DDP - Delivered Duty Paid

Simple Meaning: DDP (Delivered Duty Paid) means the seller assumes maximum responsibility and delivers the goods ready for the buyer, including import duties and taxes where applicable.

Best Used For: Buyers who want a simple, all-inclusive delivery arrangement.

Buyer Responsibility: Usually limited to receiving the goods.

Seller Responsibility: Freight, export clearance, import clearance, duties, taxes, and delivery.

Common Mistake: Sellers agreeing to DDP without understanding destination country import regulations and tax requirements.

Real Example: An e-commerce seller ships products from China to a customer in the UK under DDP. The seller arranges transportation and pays import-related charges before delivery.

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