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Logistics Nov 02, 2026 6 min read
Incoterms 2020 for Industrial Buyers: FOB, CIF, DAP and DDP Explained
Understanding cost and risk transfer points in international freight procurement.
Ahmed Tariq
Technical Director
Incoterms define exactly when the risk and cost of a shipment transfer from the seller to the buyer. Misunderstanding them can lead to unexpected liabilities.
Key Incoterms for Bulk Cargo
- FOB (Free On Board): Seller loads cargo onto the vessel. Buyer pays freight and insurance. Risk transfers once cargo is on board.
- CIF (Cost, Insurance, and Freight): Seller pays freight and insurance to the destination port. Risk transfers when cargo is loaded.
- DAP (Delivered at Place): Seller handles everything to the destination facility, EXCEPT import customs and duties.
- DDP (Delivered Duty Paid): Seller handles everything, including customs. Maximum convenience for the buyer.