Incoterms Explained for Kenya Importers: FOB, CIF, EXW, DAP & Which to Choose
27 August 2026 · By Heights Cargo · Shipping Guides
Incoterms Explained: What Kenyan Importers Need to Know
Every international shipment involves a transfer of risk, responsibility, and cost between the supplier and the buyer. Incoterms (International Commercial Terms) are the standardized abbreviations that define exactly where each party's responsibility begins and ends.
This guide explains the most common Incoterms used on UK-Kenya and China-Kenya routes, what each term means for your landed cost, and how to choose the right term for your next shipment.
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What Are Incoterms?
Incoterms are published by the International Chamber of Commerce (ICC) and updated periodically. The current version is Incoterms 2020.
Each Incoterm answers three questions:
- Who pays for freight?
- Who pays for insurance?
- Where does risk transfer from seller to buyer?
The 11 Incoterms are grouped into two categories:
| Group | Terms | Mode |
|---|---|---|
| Any mode of transport | EXW, FCA, CPT, CIP, DAP, DPU, DDP | Road, rail, air, sea |
| Sea and inland waterway only | FAS, FOB, CFR, CIF | Sea only |
For Kenyan importers, the most relevant terms are EXW, FCA, FOB, CIF, and DDP.
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The 7 Most Common Incoterms for Kenya Importers
EXW (Ex Works)
Seller delivers goods at their premises (factory or warehouse). Buyer arranges and pays everything from collection to delivery in Kenya.
| Responsibility | Who Pays |
|---|---|
| Export clearance | Buyer |
| Loading at origin | Buyer |
| International freight | Buyer |
| Insurance | Buyer |
| Import clearance | Buyer |
| Delivery to door | Buyer |
Best for: Experienced importers with their own origin logistics arrangement. Gives maximum control and often lowest total cost if you have good origin contacts.
Risk: You own the cargo the moment it is at the supplier's factory. If the supplier's warehouse burns down before collection, your loss.
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FCA (Free Carrier)
Seller delivers goods to a carrier or terminal named by the buyer. Buyer arranges freight and everything from that point.
| Responsibility | Who Pays |
|---|---|
| Delivery to named place (port or airport) | Seller |
| Export clearance | Seller |
| International freight | Buyer |
| Insurance | Buyer |
| Import clearance | Buyer |
| Delivery to door | Buyer |
Best for: Importers who want the supplier to handle export clearance and delivery to the port/airport, but who want to control the main freight themselves.
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FOB (Free On Board)
Seller delivers goods loaded on the vessel at the origin port. Buyer arranges sea freight, insurance, and everything from Mombasa onward.
| Responsibility | Who Pays |
|---|---|
| Delivery on board vessel at origin port | Seller |
| Export clearance | Seller |
| Sea freight | Buyer |
| Insurance | Buyer |
| Import clearance | Buyer |
| Delivery to door | Buyer |
Best for: Sea shipments where you have a freight forwarder or want to control the main carriage. Common for China-to-Mombasa sea LCL/FCL.
Risk: Risk transfers once goods are loaded on the ship. If the ship sinks, your loss (unless insured).
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CIF (Cost, Insurance, and Freight)
Seller pays for cost of goods, insurance, and freight to the destination port. Buyer pays for import clearance, duty, VAT, and delivery from the port.
| Responsibility | Who Pays |
|---|---|
| Goods, freight, insurance to destination port | Seller |
| Import clearance | Buyer |
| Duty and VAT | Buyer |
| Delivery from port | Buyer |
Best for: Buyers who want the supplier to handle the main shipment but prefer to control destination costs. Common in traditional trade.
Risk: Risk transfers at the origin port, even though seller pays freight and insurance. The buyer bears the risk of loss or damage during the main carriage unless separate insurance is arranged.
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DDP (Delivered Duty Paid)
Seller delivers goods to the buyer's door, cleared for import, with all duties and taxes paid.
| Responsibility | Who Pays |
|---|---|
| Everything including delivery to door and duty/VAT | Seller |
Best for: Buyers who want a single all-in price and zero logistics work. Rare in China-Kenya trade, more common in UK-Kenya where suppliers are familiar with DDP.
Risk: Buyer has no logistics work but may pay a premium for the convenience. Ensure the seller quotes duty accurately or you may face surprise charges at destination.
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Incoterms Comparison Table
| Term | Who Arranges Export Clearance | Who Arranges Main Freight | Who Arranges Insurance | Who Pays Import Duty/VAT | Who Delivers to Door |
|---|---|---|---|---|---|
| EXW | Buyer | Buyer | Buyer | Buyer | Buyer |
| FCA | Seller | Buyer | Buyer | Buyer | Buyer |
| FOB | Seller | Buyer | Buyer | Buyer | Buyer |
| CIF | Seller | Seller | Seller | Buyer | Buyer |
| DDP | Seller | Seller | Seller | Seller | Seller |
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Which Incoterm Should You Use?
| Your Situation | Recommended Term |
|---|---|
| You have a trusted agent at origin | EXW or FCA |
| You want to control sea freight booking | FOB |
| You want a simple all-in quote | DDP |
| Supplier is not experienced in export | FCA (clearer for them) |
| You buy small volumes regularly | EXW with consolidation service |
Heights Cargo recommendation: For most Kenyan importers buying from China, FOB at the nearest port (FOB Shenzhen, FOB Shanghai, FOB Ningbo) with a freight forwarder handling the main carriage gives the best balance of control and simplicity. For UK shipments, FCA at the supplier's warehouse is often better because UK suppliers are more experienced with export.
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Incoterms and Your Landed Cost
Your Incoterm determines which costs are visible to you and which are hidden in the supplier's price. A supplier quoting FOB may look cheaper than one quoting CIF, but you still need to pay freight, insurance, and clearance.
Example: USD 10,000 product from China
| Term | Supplier Quote | Freight | Insurance | Duty + VAT | Total Landed |
|---|---|---|---|---|---|
| FOB | USD 10,000 | USD 800 | USD 100 | USD 3,500 | USD 14,400 |
| CIF | USD 11,500 | USD 0 | USD 0 | USD 3,500 | USD 15,000 |
| DDP | USD 15,000 | USD 0 | USD 0 | USD 0 | USD 15,000 |
The FOB buyer has more control but needs to manage freight themselves. The DDP buyer pays a premium for convenience. The CIF buyer splits the difference.
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How Heights Cargo Works With Incoterms
- FOB/CIF from China: We handle freight, clearance, and delivery from the Chinese port
- FCA from UK: We collect from the supplier warehouse and handle everything
- EXW from China or UK: We handle everything from factory collection
- DDP: We quote a single landed cost including all duties and taxes
Send us your supplier's Incoterm and we will build a transparent landed cost breakdown for your review.
Contact: +254 769 955 505 or inquiry@heightscargo.com