Incoterms® (International Commercial Terms), a set of globally recognized trade rules published by the International Chamber of Commerce that define the responsibilities, costs, and risks between sellers and buyers in international trade.
The terms are arranged from minimum seller responsibility (EXW) on the left to maximum seller responsibility (DDP) on the right.
- EXW – Ex Works
Seller’s responsibility: Minimum
- Seller makes goods available at their factory or warehouse.
- Buyer arranges loading, transport, export clearance, shipping, import clearance, and delivery.
- Risk transfers when goods are made available to the buyer.
Example: A Cambodian cashew processor sells kernels EXW Phnom Penh. The foreign buyer handles everything from pickup onward.
- FCA – Free Carrier
- Seller delivers goods to a carrier nominated by the buyer.
- Seller handles export customs clearance.
- Risk transfers once goods are handed to the carrier.
Common for: Container shipments and multimodal transport.
- FAS – Free Alongside Ship
Sea freight only
- Seller delivers goods alongside the vessel at the port.
- Buyer pays loading, ocean freight, insurance, and import costs.
- Risk transfers when goods are placed alongside the ship.
Common for: Bulk commodities such as grain, minerals, or raw cashew nuts.
- FOB – Free On Board
Sea freight only
- Seller delivers and loads goods onto the vessel.
- Buyer pays ocean freight and insurance.
- Risk transfers once goods are on board the ship.
Very common in agricultural exports.
Example: Cambodian RCN exported FOB Sihanoukville Port.
- CFR – Cost and Freight
Sea freight only
- Seller pays freight to destination port.
- Buyer bears risk once goods are loaded onto the vessel.
- Insurance is not included.
Key point: Seller pays shipping, but buyer assumes risk during transit.
- CIF – Cost, Insurance and Freight
Sea freight only
- Seller pays:
- Ocean freight
- Marine insurance
- Export costs
- Buyer assumes risk after goods are loaded onto the vessel.
Common for international commodity trading.
Example: Cashew kernels sold CIF Shanghai.
- DPU – Delivered at Place Unloaded
- Seller bears all costs and risks to destination.
- Seller is responsible for unloading.
- Buyer handles import clearance and duties.
Unique feature: Seller pays for unloading.
- DAP – Delivered at Place
- Seller delivers goods to an agreed destination.
- Goods remain on the truck or transport vehicle.
- Buyer handles unloading, import duties, and taxes.
Common for: Cross-border land transport.
- DDP – Delivered Duty Paid
Seller’s responsibility: Maximum
- Seller pays:
- Transport
- Insurance
- Export clearance
- Import clearance
- Duties and taxes
- Buyer simply receives the goods.
Most convenient for buyers but highest risk and cost for sellers.
Quick Comparison
| Term | Export Clearance | Freight | Insurance | Import Duties | Main Risk Transfer |
| EXW | Buyer | Buyer | Buyer | Buyer | Seller’s premises |
| FCA | Seller | Buyer | Buyer | Buyer | Carrier |
| FAS | Seller | Buyer | Buyer | Buyer | Alongside ship |
| FOB | Seller | Buyer | Buyer | Buyer | On board vessel |
| CFR | Seller | Seller | Buyer | Buyer | On board vessel |
| CIF | Seller | Seller | Seller | Buyer | On board vessel |
| DPU | Seller | Seller | Seller | Buyer | After unloading |
| DAP | Seller | Seller | Seller | Buyer | At destination |
| DDP | Seller | Seller | Seller | Seller | At destination |
Which Incoterms are most common in the cashew trade?
For Cambodia’s cashew industry, the most frequently used terms are:
- FOB – Raw cashew nuts (RCN) exported to Vietnam, India, and China.
- CIF – Cashew kernels sold to overseas buyers who want freight and insurance included.
- FCA – Containerized shipments from processing factories.
- DDP – Small-volume sales to retailers or distributors where the seller handles the entire logistics chain.
For large-volume raw cashew nut exports from Cambodia to Vietnam, FOB remains the most commonly negotiated Incoterm because it clearly separates the seller’s and buyer’s responsibilities at the port of shipment.