How Do FOB, CIF, and DAP Differ in Terms of Obligations?
Quick AnswerUnder FOB, delivery is on board the vessel at the port of shipment; CIF covers seller-arranged freight and insurance to the port of destination; DAP requires delivery ready for unloading at the named place of destination. Cost and risk transfer points must be checked separately.
Scope of Rules
Under ICC Incoterms® 2020, FOB/CIF apply to sea and inland waterway transport, while DAP applies to any mode(s) of transport. The seller’s payment of freight to the destination port under CIF does not mean risk transfers only upon arrival at the port; under DAP, the buyer is usually responsible for import clearance and unloading unless otherwise specifically arranged in the contract.
Contract Wording
State the named port or specific place of delivery and the Incoterms® version, and itemize the party responsible for terminal handling charges, insurance, destination port local charges, import duties and taxes, customs broker, and final delivery.