What’s the difference between FOB, CIF, and EXW pricing terms?

These shipping terms can sound confusing, but they’re pretty straightforward once you break them down:

• FOB (Free On Board): The supplier pays for everything up to the point where the goods are loaded onto the shipping vessel. After that, it’s on you to cover freight, insurance, and anything else.
• CIF (Cost, Insurance, and Freight): The supplier includes shipping and insurance costs all the way to the destination port. You’ll just need to handle customs clearance and any inland transportation.
• EXW (Ex Works): Here, the supplier’s job ends once the goods leave their facility. You’re responsible for absolutely everything – transport, insurance, customs, you name it.

Knowing these terms helps you figure out what’s included in the price and what extra costs you need to budget for.