Two suppliers quote the "same" item at different prices — but one is delivered to the ship's side, the other is ex-warehouse with customs left to you. Are you really comparing like for like? Incoterms 2020, published by the International Chamber of Commerce (ICC), exist to answer exactly that question: who pays for what, and where risk passes from seller to buyer.
What Incoterms Are (and Aren't)
Incoterms are a set of eleven standardised three-letter trade terms that define the responsibilities of buyer and seller for delivery, risk transfer, insurance and customs. They are not a full contract and they do not set price or payment terms — but they remove the single biggest source of disputes in cross-border supply: "I thought that was included."
The Terms That Matter in Ship Supply
EXW (Ex Works)
The seller simply makes goods available at their premises. The buyer arranges everything else — transport, export, import, delivery to the vessel. Cheapest headline price, most work and risk for you.
FOB (Free On Board)
A classic maritime term. The seller delivers goods on board the vessel (or, in practice for stores, alongside) and clears them for export; risk passes once they are on board. Common for larger consignments loaded as cargo.
CIF (Cost, Insurance and Freight)
The seller pays cost, freight and a minimum insurance to the destination port. Useful when you want the supplier to handle the sea leg, but note the insurance cover required is minimal — top it up if the goods are valuable.
DAP (Delivered At Place)
The seller delivers to a named place — for ship supply this is often the quay or agent's warehouse — with the buyer handling import clearance. Increasingly the practical default for chandlery deliveries.
DDP (Delivered Duty Paid)
The seller delivers everything, customs-cleared and duties paid, to the named place. Maximum convenience for the buyer, maximum responsibility on the seller — usually reflected in the price.
FOB vs CIF vs DAP: A Quick Decision Guide
- Want the lowest price and you have strong local logistics? Lean toward FOB/EXW.
- Want the supplier to manage the sea freight? CIF — but check insurance scope.
- Want goods at the quay with minimal hassle? DAP or, for total hands-off, DDP.
Why This Matters for Quote Comparison
A quote is meaningless without its Incoterm. "USD 12,000" DDP to Singapore quay is a completely different number from "USD 12,000" EXW at a warehouse 40km away with import duty unpaid. Always normalise quotes to the same delivery term before comparing — otherwise the "cheapest" supplier may be the most expensive once you add everything they left out.
How GDS Keeps It Clear
On the GDS platform, quotes are itemised with delivery terms stated up front, so ship operators compare true landed cost rather than headline numbers. Register your vessel to receive standardised, comparable quotes from verified suppliers.
