Incoterms 2020 for poultry equipment buyers
Two quotes at the same USD price can differ by 15–25% on the delivered price to your farm, depending on the Incoterm. This guide explains what shifts under each rule and which term is right for a first-time importer versus an experienced buyer.
- EXW → DDP explained
- Where risk transfers
- Insurance responsibility
- First-time vs experienced buyer
The four terms that matter for poultry equipment
EXW (Ex Works) — you collect from the factory; FOB (Free on Board) — supplier handles export up to the ship; CIF (Cost, Insurance, Freight) — supplier ships and insures to the destination port; DAP (Delivered at Place) — supplier delivers to your farm gate but you clear customs; DDP (Delivered Duty Paid) — supplier handles everything including duties.
Where risk transfers
Risk moves from supplier to buyer at a specific point: EXW at the factory gate, FOB when goods cross the ship's rail, CIF at destination port, DAP at the named place unloaded, DDP at the named place cleared. Read the Incoterm literally — 'insured' does not always mean 'your risk covered.'
Who insures the shipment
Only CIF and CIP obligate the supplier to insure. Under FOB, EXW and DAP you must arrange marine insurance yourself — a 0.15–0.3% premium of CIF value that avoids catastrophic loss on a single shipment.
First-time buyer vs experienced importer
First-time importers should use CIF or DAP — the supplier handles freight and you handle only local clearance. Experienced importers use FOB or EXW to control freight cost and use their own forwarder relationships. DDP is rare for capital equipment because duty exposure sits on the supplier's balance sheet.
How to write it in the RFQ
State: 'Please quote CIF <destination port> using Incoterms 2020, with marine insurance at 110% of invoice value. Also quote FOB <origin port> as an alternative.' Two lines eliminates 90% of quote-comparison headaches.
Common questions
- Is DDP the safest choice?
- It looks safest but suppliers price a large risk premium into DDP quotes to cover duty and clearance uncertainty. CIF plus a local customs broker is usually 5–10% cheaper landed.
- What if my country restricts CIF?
- Several African and MENA countries require FOB imports so local marine insurance carriers earn the premium. Confirm with your freight forwarder before issuing the RFQ.