Incoterms are a set of three-letter trade terms that define, precisely, where the seller's responsibility ends and the buyer's begins — who arranges carriage, who pays which costs, and at exactly which point the risk of loss transfers. They are published by the International Chamber of Commerce and revised periodically.
They are not payment terms, they are not a contract, and they say nothing about who owns the goods. They answer one question: at what point does this stop being the seller's problem.
The four you will actually see
- EXW — Ex Works. The seller makes the goods available at their premises. Everything after that is yours: loading, export clearance, freight, insurance, import duty, delivery. The lowest headline price and the most work.
- FOB — Free On Board. The seller clears for export and loads onto the vessel you nominate. Risk transfers on board. A sea-freight term; using it for air freight is a common and expensive mistake.
- CIF — Cost, Insurance and Freight. The seller pays carriage to the destination port and buys insurance — but risk still transfers when the goods are loaded at origin. This surprises people every year: under CIF you carry the risk for a journey somebody else arranged.
- DDP — Delivered Duty Paid. The seller delivers to your named place, import cleared, duties paid. The highest headline price and the fewest of your own working hours.
Why EXW is expensive for this equipment
On EXW you are the exporter of record from a country you are not in. For medical equipment that means you are the one producing the export documentation, arranging the collection, and — critically — the one whose name is on the export declaration if anything about the shipment is queried.
Add the physical reality. Imaging equipment is heavy, fragile, often crated to a specification, and sometimes requires shock and tilt indicators, controlled temperature, or an air-ride vehicle. A forwarder who has not moved this class of goods will quote cheerfully and pack it like machinery. The claim, if there is one, is against your insurance, on a valuation you set.
And then the destination. Import clearance for medical devices is not general cargo clearance: it needs the registration and conformity documentation to match the manifest exactly. A mismatch between the model on the certificate and the model on the invoice — a suffix, a regional variant — holds a consignment at the port at demurrage rates.
Under CIF you carry the risk for a journey somebody else arranged.
How to compare two quotations honestly
Build them both up to the same point — landed, installed, cleared — and put your own time in at a real rate:
- Ex-works price.
- Export packing, if not included. For imaging, assume it is not.
- Inland carriage to port or airport, and export clearance.
- Main carriage, at a rate quoted for the actual crate dimensions and weight, not estimated.
- Marine or air insurance, at full replacement value including freight and duty.
- Import duty, taxes and clearance fees.
- Demurrage allowance — a realistic one, not zero.
- Delivery to site, rigging, and the crane or lift if the room is not on the ground floor.
- Your procurement and logistics hours, at cost.
Do that honestly and EXW frequently loses. Where it wins is high volume on a lane you already run, with a forwarder who knows the commodity — which is a real advantage, but it is an advantage of the buyer's organisation, not of the term.
What we quote, and why
We quote DDP by default and EXW, FOB or CIF on request. Not because DDP is always right, but because it is the only term where the number in the quotation is the number the equipment costs. Everything else is a number plus a list of things that have not happened yet.