08/16/2026
📚 ACOCAM TRADING INC. — CLIENT LESSON
🚢 UNDERSTANDING INCOTERMS: FOB, CIF, DAP AND DDP
Incoterms are international trade rules that determine:
✅ Who arranges and pays for transportation?
✅ Where must the goods be delivered?
✅ When does the risk pass from the seller to the buyer?
✅ Who handles import clearance, duties and taxes?
Incoterms do not determine the price of the goods or replace the sales contract. They mainly divide costs, responsibilities and risks between the seller and the buyer.
1️⃣ FOB — FREE ON BOARD
Under FOB, the seller prepares the goods, normally completes the export formalities and loads the goods on board the vessel.
The risk passes to the buyer as soon as the goods are on board.
The buyer normally handles:
• The main ocean freight;
• Insurance, if required;
• Charges at the destination;
• Import clearance, duties and taxes;
• Final delivery.
📌 Example:
You purchase goods FOB China. The supplier loads them on board the vessel in China. ACOCAM can then assist you with ocean transportation and the operations at the destination.
⚓ FOB is intended for sea or inland waterway transport.
2️⃣ CIF — COST, INSURANCE AND FREIGHT
Under CIF, the seller pays for:
• The goods;
• Ocean freight to the destination port;
• Minimum transport insurance.
However, there is an important distinction:
⚠️ Although the seller pays the freight and minimum insurance to the destination port, the risk passes to the buyer when the goods are loaded on board the vessel at the port of origin.
The buyer normally pays:
• Destination charges not included in the CIF agreement;
• Import clearance;
• Customs duties and taxes;
• Transportation after the port.
📌 Example:
Your supplier sells the goods CIF Matadi. The supplier pays the freight and minimum insurance to Matadi Port. However, the risk has already passed to you once the goods are loaded on board at the port of origin.
⚓ CIF is also intended for sea or inland waterway transport.
3️⃣ DAP — DELIVERED AT PLACE
Under DAP, the seller arranges and pays for transportation to the agreed destination.
The goods are placed at the buyer’s disposal on the arriving vehicle, ready for unloading.
The buyer normally handles:
• Unloading;
• Import customs clearance;
• Customs duties;
• Import taxes.
The seller bears the risk until the goods are made available at the agreed destination, before unloading.
📌 Example:
The contract states “DAP Customer’s Warehouse, Kinshasa.” The seller arranges transportation to the warehouse. The customer remains responsible for import clearance, duties, taxes and normally unloading.
4️⃣ DDP — DELIVERED DUTY PAID
DDP places the greatest responsibility on the seller.
The seller normally handles:
• Transportation to the agreed destination;
• Export formalities;
• Import customs clearance;
• Customs duties;
• Import taxes.
The goods are made available to the buyer at the agreed destination, ready for unloading. Unloading normally remains the buyer’s responsibility unless the parties agree otherwise.
📌 Example:
The contract states “DDP Customer’s Warehouse, Kinshasa.” The seller handles almost everything up to the warehouse, including import clearance, duties and taxes.
⚠️ The correct abbreviation is DDP, not “DDAP.”
🧠 QUICK COMPARISON
FOB: The seller loads the goods on board the vessel.
CIF: The seller also pays the ocean freight and minimum insurance, but the risk passes to the buyer once the goods are on board at origin.
DAP: The seller delivers to the agreed place, while the buyer handles import clearance, duties and taxes.
DDP: The seller delivers to the agreed place and also handles import clearance, duties and taxes.
✅ ACOCAM ADVICE
Before paying for an order, always ask the supplier:
1. Which Incoterm is being offered?
2. What exact port or place is stated after the Incoterm?
3. Which charges are included in the price?
4. Who will pay for customs clearance, duties, taxes and final delivery?
5. What insurance covers the goods?
A lower purchase price may hide additional charges at the destination. Always compare the total landed cost—not only the price announced by the supplier.
ACOCAM TRADING INC.
Better understanding for better importing.
