Two overseas supplier quotes can show the same product and unit price but leave you with very different transport responsibilities and destination costs. The Incoterms® rule in a quote helps allocate specific obligations, costs, and risk between the seller and buyer. It does not replace the sales contract or settle every question about payment, product quality, ownership, or remedies.
Require the full term, place, and version
Do not compare a quote that says only “FOB,” “CIF,” or “DDP.” Ask the supplier to state the three-letter rule, the precise named place or port, and the edition, such as “FCA [named terminal], Incoterms® 2020.” The named place matters because it identifies where delivery occurs or where the seller must arrange carriage, depending on the rule. The edition makes clear which version the parties intend to use.
Then check that the named place makes sense for the transport route and product. “CIF” should identify a destination port; “DAP” should identify the destination place; “FCA” should identify the agreed handover location. Ask for corrections if a quote combines a rule with a place or mode that does not fit.
Know whether the rule fits the shipment mode
Incoterms® 2020 has rules for any mode or combination of modes, including EXW, FCA, CPT, CIP, DAP, DPU, and DDP. Four rules—FAS, FOB, CFR, and CIF—are for sea and inland waterway transport. For containerised or multimodal cargo handed to a carrier before it is loaded onto a vessel, ask your freight professional whether a rule such as FCA is more suitable than FOB. The right choice depends on the actual handover and shipping arrangement.
Understand what common terms include
Under EXW, the seller makes the goods available at the agreed location and the buyer has substantial responsibility for collection and export arrangements. Export clearance by the buyer can create practical difficulties across borders, so confirm who can lawfully and operationally handle it before accepting the term.
Under FCA, the seller clears the goods for export and delivers them to the carrier or other person nominated by the buyer at the named place. Under FOB, for sea or inland waterway transport, the seller delivers the goods on board the buyer’s nominated vessel at the named port of shipment; the buyer generally arranges the main carriage from there.
Under CIF, the seller arranges and pays the cost and freight to the named destination port and obtains the required minimum insurance cover under the rule. However, the delivery and risk transfer happen when the goods are on board the vessel at the shipment port—not when they arrive at destination. If you need a different level of insurance, discuss it expressly and confirm the policy details.
Under DAP, the seller arranges carriage and bears risk to the named destination place, with the goods ready for unloading; the buyer handles import clearance. Under DDP, the seller has the broadest set of delivery obligations, including import clearance and applicable duties and taxes under the rule. A seller may not be able to perform those import obligations in every destination, so verify capability and local requirements before agreeing.
Ask what is included outside the rule
Incoterms® allocate defined tasks, costs, and risk, but they do not tell you the total landed cost by themselves. Ask the supplier to itemise the charges covered by its quote and those excluded: origin pickup, export documentation, terminal handling, main freight, insurance, destination handling, customs brokerage, duties and taxes, unloading, and final delivery where relevant. Not every charge applies to every shipment.
Also confirm who will be named as importer of record, who will provide customs information, and what shipping documents you will receive. Have your own freight forwarder or customs professional review the route, cargo type, and destination charges. Verify tariff classification and import requirements with qualified sources for your market instead of relying only on a supplier’s freight estimate.
Compare quotes on the same delivery basis
Give each supplier the same product specification, quantity, packaging, destination, and required delivery point. Ask for the same Incoterms® rule and named place where practical. If suppliers quote different terms, make a comparison sheet that lists what each price includes, who books each transport leg, where risk transfers, who arranges insurance, and what destination charges remain yours.
A lower unit price can be outweighed by freight, insurance, handling, or customs costs that are excluded. Ask for a revised quote when the delivery basis is unclear instead of filling the gaps with assumptions. Keep the accepted rule and named place consistent across the quotation, purchase order, and sales contract.
Confirm the final arrangement before shipment
Before paying or authorising dispatch, make sure the commercial documents identify the same product, quantity, delivery rule, named place, version, and payment terms. Confirm the booking details and insurance scope with the party responsible for them. If a supplier proposes changing the term after the order is placed, get the revised cost and responsibilities in writing and review the effect with your logistics partner before agreeing.
For buyers comparing Asian suppliers, a clear delivery basis makes quotations easier to assess alongside the product, quality, and timing. Manufacturers and exporters can also help buyers make informed comparisons by listing accurate product and export capabilities on an Asia Trade Directory business profile. Create your supplier profile with current company, category, and contact information so buyers can review your offer.