Written for: Buyers negotiating supply contracts
The only question that matters
Incoterms decide where cost and risk transfer from seller to buyer. Everything else follows from that single point. When Bromley Logistics reviews a new client's purchase contracts, this is the first thing our team checks, because it determines who is actually responsible for insurance, freight and customs at each leg of the journey.
The terms importers meet most
EXW, FOB, CIF, DAP and DDP cover the overwhelming majority of trade seen across our client base.
- EXW puts every cost and risk on the buyer from the supplier's door
- FOB transfers risk once goods are loaded on the vessel
- CIF includes freight and minimum insurance to destination port
- DAP and DDP place delivery obligations on the seller
Where buyers lose money
Accepting CIF or DDP without visibility of the built-in freight margin, and assuming insurance cover is adequate when it is minimum-cover only. Suppliers routinely quote CIF because it is commercially attractive to them, not because it is the cheapest route to your door — Bromley Logistics regularly re-quotes the same shipment on an FOB basis and finds a materially lower landed cost.
Choosing the right term for your business
Buyers with an established forwarder generally do better negotiating toward FOB or FCA and controlling the freight and insurance themselves, since it puts visibility and cost control in their own hands rather than buried inside a supplier's quote.
