Incoterms Explained for Wholesale Food Buyers: EXW, FOB & CIF

In wholesale food trade, the price is only half the quote. The other half is the Incoterm — the three-letter rule that decides who arranges shipping, who pays for it, and exactly where responsibility passes from supplier to buyer. Misunderstand it and a "cheap" offer can become the expensive one. Here is a clear guide to the three Incoterms you will meet most often on Sentrick Foods.

What an Incoterm actually defines

Incoterms (published by the International Chamber of Commerce) answer three questions for every shipment: who organizes transport, who pays each cost along the way, and at which point the risk of loss or damage transfers to the buyer. They do not cover payment terms, title, or who owns the goods — those are separate agreements.

EXW — Ex Works

The supplier simply makes the goods available at their own premises (factory, mill, or warehouse). From that door onward, the buyer handles everything: loading, export clearance, freight, insurance, and import. EXW gives the buyer maximum control but maximum responsibility — best for experienced importers with their own freight forwarder.

FOB — Free On Board

The supplier delivers the goods, cleared for export, loaded onto the vessel at the named port of origin. Risk transfers once the goods are on board. From there the buyer pays ocean freight, insurance, and import costs. FOB is the most common term for container food shipments because it splits duties at a clean, well-understood point: the loading port.

CIF — Cost, Insurance and Freight

The supplier arranges and pays for freight and a basic marine insurance policy to the named destination port. Convenient for buyers who want a landed-to-port price without arranging shipping themselves — but check the insurance level, as CIF requires only minimum cover. Risk still transfers at the origin port (as with FOB), even though the supplier pays freight onward.

How to quote and compare offers cleanly

Always state the Incoterm with the named place — "FOB Jebel Ali" or "CIF Rotterdam," not just "FOB." When comparing two suppliers, convert both to the same basis (for example, estimate the landed cost to your port) so you are comparing like for like. A lower EXW price can end up higher than a CIF offer once freight and clearance are added.

Keep the terms on record

On Sentrick Foods, suppliers quote with clear commercial terms, and every quote and order is kept on record end to end — so the Incoterm, named place, and price basis are never left to memory. Start sourcing with clear terms →