MHD Logistics LLC

Wadi Kabir, Muscat, Sultanate of Oman.

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Email: [email protected]

Call us: +968 7155 7267

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Wadi Kabir, Muscat,
Sultanate of Oman.

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+ 968 7155 7267

Email

[email protected]

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Incoterms Guide

Incoterms Master Guide

International Commercial Terms define the responsibilities of buyers and sellers.
Use this guide to understand where risk transfers and who pays for what.

Seller Responsibility Buyer Responsibility
EXW Ex Works Any Mode

Maximum obligation on the Buyer. The seller simply makes the goods available at their premises (factory/warehouse). The buyer bears all risks and costs from that point onward, including loading the cargo onto the truck.

MHD Tip: Avoid EXW for international exports if possible, as the seller has no obligation to clear customs, which can cause documentation issues. Use FCA instead.
FCA Free Carrier Any Mode

The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at a named place (e.g., seller's warehouse or a terminal). Risk transfers when goods are delivered to the carrier.

MHD Tip: This is the most flexible term for modern container shipping. It allows the buyer to control the main freight costs while the seller handles export formalities.
FAS Free Alongside Ship Sea Only

Seller places goods alongside the vessel (e.g., on the quay) at the named port of shipment. Risk transfers when goods are alongside the ship.

MHD Tip: Primarily used for Bulk Cargo (grain, oil) or Breakbulk (oversized machinery) that isn't containerized.
FOB Free On Board Sea Only

Seller delivers goods on board the vessel nominated by the buyer. Seller bears all costs/risks until goods are on the ship. Buyer pays freight.

MHD Tip: Avoid using FOB for containerized cargo; use FCA instead. With containers, "on board" is hard to define since containers are dropped at a terminal yard first.
CPT Carriage Paid To Any Mode

Seller pays freight to bring goods to the destination. However, Risk transfers to the buyer as soon as goods are handed to the carrier at origin.

MHD Tip: Good for buyers who want the seller to arrange transport but are willing to take the risk (insurance is recommended).
CIF Cost, Insurance & Freight Sea Only

Similar to CFR, but Seller must procure minimum insurance coverage (Clause C) for the buyer's risk during transit.

MHD Tip: The insurance required is minimal. If you are the buyer, ensure the policy covers the full value of your specific goods.
CFR Cost and Freight Sea Only

Seller pays cost and freight to the named port of destination. Risk transfers to buyer when goods are on board the vessel.

MHD Tip: Common for bulk commodities. The buyer is responsible for insurance and unloading at the destination port.
CIP Carriage & Insurance Paid Any Mode

Similar to CPT, but Seller pays for insurance. Under Incoterms 2020, Seller must obtain a higher level of insurance (Clause A - All Risk) unless agreed otherwise.

MHD Tip: The safest option for buyers who want the seller to handle logistics and insurance up to the destination.
DAP Delivered at Place Any Mode

Seller delivers goods to a named place (e.g., buyer's warehouse). Goods are not unloaded. Seller bears all risks to that point.

MHD Tip: Very common for Land Transport. The buyer is responsible for import customs clearance and unloading the truck.
DPU Delivered at Place Unloaded Any Mode

Seller delivers and unloads the goods at the named place. Seller bears risk until unloaded. (Replaces the old DAT).

MHD Tip: The only Incoterm where the seller is required to unload. Useful for delivery to construction sites or project logistics.
DDP Delivered Duty Paid Any Mode

Maximum obligation on the Seller. Seller is responsible for delivering goods to the destination, clearing import customs, and paying duties/taxes.

MHD Tip: Sellers should be cautious with DDP if they cannot obtain an import license in the buyer's country.