Understanding Incoterms for Apparel Importers

Incoterms define where responsibility for a shipment transfers between seller and buyer — not just who pays for freight, but who carries the risk at each stage of the journey.

Under FOB (Free on Board), the manufacturer's responsibility ends once goods are loaded onto the shipping vessel at the origin port — from there, the buyer (or their freight forwarder) manages the rest.

Under CIF (Cost, Insurance, and Freight), the manufacturer arranges and pays for freight and insurance to the destination port, though risk still typically transfers once goods are loaded.

Neither term is universally 'better' — the right choice depends on whether you already have a freight forwarder relationship and how much control you want over the shipping leg. What matters most is that the term is agreed in writing before production begins, not assumed.