The short answer
Incoterms are the ICC's standard trade terms defining who pays for transport, insurance and customs, and where risk passes from seller to buyer. There are 11 rules in Incoterms 2020. Ghanaian importers often buy CIF for simplicity, but FOB or FCA usually gives more control over freight costs and free days at Tema.
The 11 rules at a glance
| Rule | Name | Risk passes to buyer | Mode |
|---|---|---|---|
| EXW | Ex Works | Buyer, from seller's premises | Any |
| FCA | Free Carrier | Buyer, from hand-over to carrier | Any |
| CPT | Carriage Paid To | Buyer, from hand-over to first carrier | Any |
| CIP | Carriage and Insurance Paid To | Buyer, from hand-over to first carrier | Any |
| DAP | Delivered at Place | Buyer, on arrival at named place | Any |
| DPU | Delivered at Place Unloaded | Buyer, after unloading | Any |
| DDP | Delivered Duty Paid | Buyer, at named place, duty paid by seller | Any |
| FAS | Free Alongside Ship | Buyer, alongside ship at origin | Sea |
| FOB | Free on Board | Buyer, once on board at origin | Sea |
| CFR | Cost and Freight | Buyer, once on board at origin | Sea |
| CIF | Cost, Insurance and Freight | Buyer, once on board at origin | Sea |
FOB versus CIF for imports into Tema
Under CIF the supplier chooses the carrier and pays freight, but you pay destination charges and often inherit a line with short free days. Under FOB you or your forwarder choose the carrier, negotiate free time and see the true freight cost. For regular importers, FOB or FCA usually wins.
Avoid DDP into Ghana unless the seller is set up for it
DDP makes the foreign seller responsible for Ghanaian duty and clearance. Few overseas sellers can do this properly, and it can cause problems at clearance. If you want a delivered price, DAP with you handling clearance is usually cleaner.
For exporters
FCA or FOB keeps your responsibility ending at Tema or Kotoka. CIF or CIP lets you offer a delivered-to-port price, but you manage freight and insurance.
Frequently asked questions
Which Incoterm is best for importing into Ghana?
For regular importers, FOB or FCA usually gives the most control over freight cost and free days.
Is CIF risk transferred at the destination port?
No. Under CIF, risk passes to the buyer once goods are on board at the origin port, even though the seller pays freight and insurance.
Can I use FOB for air freight?
FOB is for sea and inland waterway. For air or containerised multimodal moves, FCA is the correct equivalent.
