Shipping Term

1. ExWorks (EXW)
Under Ex-Works, the buyer (the importer) is responsible for the full transport from pick-up location up to delivery address. This includes pick-up, stuffing, consolidation, origin (air)port handling, customs export clearance, sea or airfreight, destination (air)port handling, customs import clearance, on-carriage, insurance and import duties.

Advantages:

As a buyer, all costs and risks lie with you alone, providing better insight in all costs and reducing the risk of the exporter taking advantage of arranging local transport for additional profit.
As a buyer, you are in full control of the entire shipment. It provides visibility and the possibility to select a trusted agent yourself.

Disadvantages:

If goods are selected for inspection at origin, you as a buyer are bearing the costs.
If the seller (the exporter) does not have an export license, they will usually prefer ExWorks, so you as a buyer have to pay for one.

2. FOB (“Free On Board” or “Freight On Board”)
Under FOB, probably the most commonly used Incoterm, the seller is responsible for delivering the cargo to a port or an airport, handling charges at the (air)port and customs export clearance. Consequently, the buyer is responsible for ocean/airfreight, customs import clearance, on-carriage, insurance and import duties.

Advantages:

The seller may be able to arrange local aspects in the foreign country a little cheaper and have better local contacts to arrange this.
Your supplier probably knows the export documents needed for their products.

Disadvantages:

May increase the cost of the goos as sellers may include some profit for arranging the local aspects they need to cover under FOB.
Looks more expensive than shipping CIF (Cost, Insurance and Freight) or CFR (Cost and Freight).

3. CIF (Cost, Insurance and Freight)
Under CIF, the seller is responsible for delivering the cargo to a port, handling charges at the port, customs export clearance, ocean/air freight, destination port handling charges handing over the cargo and insurance. Consequently, the buyer is responsible for customs import clearance, on-carriage and import duties.

Advantages:

Cheaper shipping costs
Seemingly cheaper goods

Disadvantages:

There can be quite some hidden charges when handing over the cargo
Clearing requirements may be unclear, as well as unloading address, from where you’ll need to pick up the goods (no control over this)