Incoterms define who pays for transport, who carries the risk and where it passes from seller to buyer. Four terms cover most quotes you will receive.
EXW (Ex Works)
You collect the goods at the seller premises. Transport, loading, export and import formalities are on you. Lowest price, highest effort.
FOB (Free On Board)
The seller delivers the goods on board the vessel at the port of shipment. From that point the freight and the risk are yours. Used for sea transport.
CIF (Cost, Insurance and Freight)
The seller pays freight and insurance to your destination port. Note that the risk still passes to you once the goods are on board at origin.
DAP (Delivered At Place)
The seller delivers to the named place, ready for unloading. Import clearance, duties and VAT remain with the buyer.
How to compare quotes
Never compare an EXW price with a DAP price directly. Bring every quote to the same point, usually delivered to your warehouse, and remember that UAE VAT is 5 percent.
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