Incoterms Explained: FOB, CIF, EXW and DDP

Incoterms are standard trade terms that say who is responsible for freight, insurance, export and import clearance, and where the risk passes from seller to buyer.

• EXW (Ex Works): the seller has the goods ready at their premises. The buyer handles everything else, including export clearance. Suits experienced buyers.
• FOB (Free On Board): the seller delivers the goods and clears export up to the ship. The buyer pays sea freight, insurance and import clearance. Very common for sea freight.
• CIF (Cost, Insurance and Freight): the seller pays freight and insurance to the destination port. The buyer handles import clearance and local costs.
• DAP (Delivered at Place): the seller arranges transport to the named place. The buyer handles import clearance, duty and taxes.
• DDP (Delivered Duty Paid): the seller handles everything, including import duty. Simple for buyers, but often costs more.

For Cambodian importers

• FOB gives you control: you choose the forwarder and often get better freight rates.
• CIF is convenient, but check what insurance is included.
• DDP is unusual for Cambodia, so confirm who is legally the importer of record.

Always write the Incoterm with a named place (for example "FOB Shanghai") in the contract and invoice.