Incoterms for Iranian exports: EXW, FCA, FOB Bandar Abbas, CFR, CIF and DAP

What an Incoterm does and does not cover

Incoterms are rules published by the International Chamber of Commerce. The current edition is Incoterms 2020. Each term allocates three things: delivery (where the seller hands over the goods), costs (who pays transport, loading, export and import clearance) and risk (who bears loss or damage at each stage).

An Incoterm does not set the price, the payment method, the transfer of ownership or the quality. Those belong in your contract and order. On ASL Market the supplier confirms price, quantity, freight, Incoterm and ship-by date before you pay, so the Incoterm is part of the agreed order.

EXW (Ex Works)

Under EXW the supplier makes the goods available at its own premises, for example a factory in Kerman or a warehouse in Tehran. You pay and bear the risk for everything after that: loading onto the truck, Iranian export clearance, inland transport, main freight and import clearance.

EXW looks cheapest on paper but is often impractical for a foreign buyer, because export clearance in Iran has to be handled by a party able to do it there. Use EXW only if you have a reliable forwarder in Iran who will act as exporter.

FCA (Free Carrier)

Under FCA the supplier clears the goods for export and hands them to the carrier you nominate at a named place, such as the supplier's warehouse or a container yard in Bandar Abbas. Risk passes to you when the goods are delivered to that carrier.

FCA is the term the ICC recommends for containerised cargo, because containers are usually handed over at a terminal before they are loaded on the ship. It suits buyers with their own forwarder who want control of the main freight.

FOB Bandar Abbas (Free On Board)

Under FOB Bandar Abbas the supplier delivers the goods on board the vessel you nominate at Bandar Abbas (usually the Shahid Rajaee port). The supplier pays inland transport to the port, export clearance and loading. Risk passes to you when the goods are on board. You pay sea freight, insurance and everything at destination.

FOB is widely quoted by Iranian exporters and is well understood by buyers. Strictly, it is meant for bulk and break-bulk cargo loaded directly on board, but it is common for containers in practice. If your forwarder can book space from Bandar Abbas, FOB gives you control of freight cost and transit time.

CFR (Cost and Freight)

Under CFR, for example CFR Jebel Ali or CFR Mersin, the supplier pays sea freight to your port. Risk, however, passes to you at the same point as FOB: when the goods are loaded on board in Iran. If the goods are damaged at sea, it is your loss, so you should arrange cargo insurance yourself.

CFR is popular for first orders because the supplier books the vessel and you only handle arrival. Check whether destination terminal handling charges are included, since these are often billed to the buyer at the port of discharge.

CIF (Cost, Insurance and Freight)

CIF is CFR plus cargo insurance bought by the supplier in your favour. Under Incoterms 2020, the minimum cover for CIF is Institute Cargo Clauses (C), a limited cover. Risk still passes to you when the goods are loaded on board in Iran; the insurance is what protects you during the voyage.

If your goods are valuable or sensitive, ask in the contract for broader cover, such as Institute Cargo Clauses (A), and ask for the insurance certificate with the shipping documents. Check that the insurer can pay claims in a way that works for you.

DAP (Delivered at Place)

Under DAP the supplier delivers the goods to a named place in your country, such as your warehouse, ready for unloading. The supplier pays all transport to that place and bears the risk until arrival. You pay unloading, import clearance, duties and taxes.

DAP is common for road freight to Turkey and Iraq and for rail deliveries to Central Asia, where the supplier's trucking or rail partner can deliver door to door. Because the supplier carries the transit risk, DAP prices are higher, but the price is closer to your real landed cost.

Who pays what: comparison table

The table summarises the six terms for a typical Iranian shipment leaving through Bandar Abbas or by road. S means the supplier pays; B means the buyer pays.

Which Incoterm to choose for which product

There is no single best term. The right choice depends on the product, the route and whether you have a forwarder. The table shows what importers commonly use.

Common Incoterm mistakes

• Writing FOB without a port, so it is unclear where the supplier's costs end
• Using FOB, CFR or CIF for rail, road or air cargo, where FCA, CPT, CIP or DAP fit
• Assuming CIF insurance covers everything; the minimum cover is limited
• Forgetting destination terminal charges under CFR and CIF
• Choosing EXW without a party able to clear the goods for export in Iran

Agreeing the Incoterm on ASL Market

State your preferred Incoterm and named place when you chat with a supplier or post a buying request at /post-request. The supplier confirms price, quantity, freight, Incoterm and ship-by date in the order. If the supplier arranges freight, it adds the freight to the invoice after checking it.

You then pay in USDT, and ASL Market holds the payment until you confirm receipt; see /trade-assurance. Import rules differ by country; check your own country's rules on trade with Iran before you order. For help, contact support on Telegram @alirezaasll, WhatsApp +98 912 021 1407 or a support ticket.

FAQ

What does FOB Bandar Abbas mean?

The supplier delivers the goods loaded on board your nominated vessel at Bandar Abbas, after paying inland transport and Iranian export clearance. Risk passes to you once the goods are on board. You pay the sea freight, insurance and all destination costs.

What is the difference between CFR and CIF?

Under both, the supplier pays sea freight to your port and risk passes to you when the goods are loaded in Iran. Under CIF the supplier also buys cargo insurance in your favour; under CFR you insure the cargo yourself.

Which Incoterm is best for a first order from Iran?

Many first-time importers choose CFR or CIF to their own port, because the supplier books freight and they only manage arrival. If you already work with a forwarder, FCA or FOB Bandar Abbas gives you more control over freight cost and timing.

Can I use FOB for air freight of saffron?

No. FOB, CFR and CIF are for sea and inland waterway transport only. For air freight use FCA at the departure airport, or CPT, CIP or DAP if the supplier pays transport to your country.

Who pays import duties under DAP?

The buyer. Under DAP the supplier delivers to the named place ready for unloading, but import clearance, duties and taxes are the buyer's cost. If you want the supplier to pay them, the term is DDP, which is rarely practical for Iranian exports.

Does CIF insurance fully protect my goods?

Not necessarily. Incoterms 2020 requires only minimum cover under CIF, Institute Cargo Clauses (C). For valuable or sensitive goods, ask for broader cover in the contract and request the insurance certificate.