FOB vs CIF vs DAP for Project Procurement
Which Incoterm should a project buyer choose, and what does each actually transfer?
Under FOB the seller delivers the goods on board the vessel at the named port of shipment and risk passes there; the buyer arranges main carriage. Under CIF the seller contracts and pays for carriage and minimum insurance to the named destination port, but risk still passes on board at origin. Under DAP the seller delivers at the named destination place ready for unloading, carrying risk the whole way, while import clearance and duties remain the buyer's. The right choice depends on who genuinely controls freight and clearance at the destination.
Published 2026-09-19 · Reviewed by the REPONS procurement desk · Next review 2027-03-19 · 9 min read
What each term transfers
The most frequent misunderstanding is that CIF moves risk to the destination. It does not: under CIF the seller pays carriage and insurance to the destination port while risk passes at origin, on board.
| Term | Risk passes | Carriage paid by | Insurance | Import clearance |
|---|---|---|---|---|
| FOB (sea) | On board at origin port | Buyer | Buyer's decision | Buyer |
| CIF (sea) | On board at origin port | Seller to destination port | Seller, minimum cover | Buyer |
| DAP (any mode) | At named destination place | Seller | Seller's decision | Buyer |
Choosing per destination
FOB suits buyers with a freight forwarder and negotiated rates. CIF suits buyers who want a single delivered-to-port price but accept cargo risk from origin. DAP suits buyers who want the goods brought to site but retain, and are able to perform, import clearance.
DDP should be treated cautiously. It places import clearance and duties on the seller, which is not possible or not sensible in every country.
Always name the place and the edition
An Incoterm without a named place is incomplete. Write it fully — for example "DAP Nouakchott, Mauritania — Incoterms® 2020" — in the RFQ, the quotation and the purchase order.