Two quotes for the same CAT6A cable can look very different simply because they use different Incoterms. Before comparing prices, procurement teams need to know exactly which costs and risks each quote includes.
What are Incoterms?
Incoterms are standard trade terms published by the International Chamber of Commerce (ICC). The current version is Incoterms 2020. Each term defines who arranges and pays for transport, export and import clearance, and insurance — and the point at which risk passes from seller to buyer.
FOB — Free On Board
Under FOB Nhava Sheva, the seller delivers the cable cleared for export and loaded on the vessel at the origin port. From that point, you pay the ocean freight, insurance, destination charges and import duties, and you carry the risk. FOB suits buyers with their own freight forwarder and good contract rates.
CIF — Cost, Insurance and Freight
Under CIF Rotterdam, the seller also pays ocean freight and insurance to the destination port. A common misunderstanding: risk still passes to the buyer when the goods are loaded at origin, not when they arrive. CIF insurance only needs to meet the minimum cover (Institute Cargo Clauses C, at 110% of value) unless you agree more. CIF suits buyers who prefer a single price to their port.
How do the main terms compare?
| Term | Seller pays freight to | Risk passes at | Typical use |
|---|---|---|---|
| EXW | — (buyer collects) | Seller's premises | Buyer controls everything, including export clearance |
| FCA | Named place, e.g. container terminal | Handover to buyer's carrier | Recommended by the ICC for containers |
| FOB | Loaded on vessel at origin | On board at origin port | Sea freight, buyer's forwarder |
| CIF | Destination port, with minimum insurance | On board at origin port | Sea freight, seller's freight and insurance |
| DAP | Named place at destination | Arrival, ready for unloading | Buyer handles import clearance and duty |
| DDP | Named place at destination, duty paid | Arrival | Seller handles everything, including import duty |
Why does the ICC prefer FCA and CIP for containers?
FOB and CIF were designed for cargo loaded over a ship's rail. Containers are handed to the carrier at a terminal days before loading, so the seller technically keeps the risk while the container sits out of its control. FCA and CIP move the handover to that terminal. In practice, FOB and CIF remain widely used for container shipments, and many buyers are comfortable with them — but it is worth knowing the gap.
Which documents should come with the cable?
- Commercial invoice and packing list.
- Bill of lading.
- Certificate of origin — preferential where a trade agreement applies, such as India–UAE CEPA or India–UK CETA.
- Insurance certificate for CIF and CIP shipments.
- Batch test reports and compliance declarations such as RoHS and REACH.
Compare on landed cost
To compare suppliers fairly, convert every quote to landed cost at your warehouse: product price, freight, insurance, destination charges, import duty and the inventory cost of the lead time. A lower FOB price with a longer lead time can cost more once safety stock is included.
Channeltech's standard terms are FOB Nhava Sheva (Mumbai) and CIF to your nominated port, invoiced in USD, EUR or GBP. Use our export shipment calculator to estimate container load and arrival dates for your port.