An Incoterm is a line drawn through the journey: everything on one side is the seller's cost and risk, everything on the other side is yours. For drinkware the three that come up most are FOB, CIF and DDP, and the difference between them is not just money — it is who is responsible when something goes wrong at sea.
Where the line falls
| FOB | CIF | DDP | |
|---|---|---|---|
| Seller arranges | To the port of loading | To the destination port | To your door, duties paid |
| Freight paid by | You | Seller, inside the price | Seller, inside the price |
| Marine insurance | Yours to arrange | Seller, minimum cover | Seller |
| Import duty and clearance | You | You | Seller |
| Visibility of the freight cost | Highest | Low | Lowest |
Which one to choose
- FOB is the most transparent and the most common in this trade. You see the freight as a separate line and you can shop for it. It also means you own the risk from the moment the goods are on board.
- CIF is convenient when you have no freight forwarder. The trade-off is that the freight is bundled and the insurance cover is the minimum the term requires rather than the cover you would have bought.
- DDP is the simplest to receive and the hardest to compare, because duty, freight and clearance are inside a single number. It is often the right answer for a first small order and rarely the right answer for a large programme.
The line most quotes leave out
Where the risk transfers, not just where the cost ends. Ask explicitly. A quote that bundles freight but transfers risk early is the worst of both, and it is the arrangement that produces the argument nobody wins when a container is damaged.
Questions buyers ask
Which is cheapest?
Not a fixed answer — it depends on your own freight rates and your duty position. FOB is usually cheapest for a buyer with a forwarder; DDP is usually most expensive per unit and least effortful.
Can I change the term later?
Yes, before shipping. It is a quotation term rather than a manufacturing one, which is also why the unit price changes with it.
Who handles a customs problem?
Under FOB and CIF, you. Under DDP, the seller — which is the reason DDP carries a premium.
Freight is one of the five lines a quotation should itemise; the cost guide explains what belongs to which.
