Why this matters
Incoterms 2020, published by the International Chamber of Commerce (ICC), are the international rulebook for who pays for what, when risk transfers, and which party arranges insurance. For pipe fitting imports from China, four terms cover ~90% of business: FOB, CFR, CIF (sea-only), and DAP (any mode). Misusing FOB for a containerised shipment, or assuming CIF includes full-value insurance, is the most common cause of disputes when cargo is damaged or delayed. This guide explains Incoterms 2020 for fittings export so buyers and sellers price the same scope.
Incoterms 2020 give a shared vocabulary across the FOB, CFR, CIF and DAP options that fittings buyers actually use.
Term-by-term comparison
FOB — Free On Board (sea / inland waterway only).
- Seller's job: deliver goods on board the vessel at the named port of shipment.
- Risk transfer: when goods are placed on board.
- Buyer pays: ocean freight, insurance, destination port charges, customs.
- Suitable for: bulk cargo, breakbulk, RoRo. ICC notes FOB is technically inappropriate for containers handed over at the terminal (FCA is preferred), but in practice FOB Tianjin / FOB Shanghai remains the most-quoted term in China steel trade.
CFR — Cost and Freight (sea / inland waterway only).
- Seller's job: pay ocean freight to the named destination port.
