Incoterms 2020 for industrial buyers, a one-page brief
EXW, FOB, CFR, CIF, DDP. The five terms that matter most for industrial supplies and procurement, with the responsibility and cost split spelled out.
2026-05-10 · 5 min read · By Above Infinity supplies desk
Incoterms describe who pays for what, and who is at risk for what, as a shipment moves from seller to buyer. For industrial supplies and procurement across Asia, five of them cover almost every conversation.
EXW, Ex Works
Goods are made available at the seller's premises. The buyer takes everything from there: loading onto the truck, export clearance, freight, import clearance, delivery.
- Risk transfer: at the seller's loading dock.
- Buyer pays: everything after that.
- When to choose: you have your own logistics arm in the origin country and want maximum control.
FOB, Free On Board
The seller handles transport and export clearance up to and onto the vessel. From the moment the goods cross the ship's rail, they are yours.
- Risk transfer: when loaded on the vessel at the origin port.
- Buyer pays: ocean freight, marine insurance, import clearance, onward delivery.
- When to choose: you have a freight forwarder relationship and want to lock in your own ocean rates.
CFR, Cost and Freight
The seller pays for ocean freight to the destination port, but risk still transfers at the origin port (same as FOB).
- Risk transfer: at the origin port (early).
- Cost transfer: at the destination port.
- When to choose: you want to outsource freight booking but are comfortable arranging your own marine insurance and import clearance.
CIF, Cost, Insurance, Freight
Like CFR, plus the seller buys a minimum-cover marine insurance policy on your behalf.
- Risk transfer: at the origin port.
- Cost transfer: at the destination port (plus insurance).
- When to choose: single point of contact for freight + basic insurance, but be aware the cover is the minimum (Institute Cargo Clauses C), many programmes top up to clauses A.
DDP, Delivered Duty Paid
The seller handles literally everything: freight, insurance, import clearance, duties, taxes, last-mile delivery. The buyer just receives the goods.
- Risk transfer: at the buyer's named destination.
- Buyer pays: the unloading at delivery (usually) and that's it.
- When to choose: no in-house import expertise, or one-off orders where the cost of setting up customs handling isn't worth it.
Picking one
The rule of thumb: the more confidence you have in your own logistics chain, the further you can move toward EXW. Buyers with established forwarders typically prefer FOB or CFR. New importers or those buying outside their usual origin lanes default to CIF or DDP for safety.
What we offer
Above Infinity supports the full chain, EXW, FOB, CFR, CIF, and DDP. We do the routine: COA, packaging declaration, B/L, customs handling, sailing schedule confirmation, and discharge coordination. Bonded warehousing is available for buffer-stock programmes when you want to land material early and call it off as the line consumes it.