Two offers on the same product can look far apart on price and be almost identical in landed cost. The difference is usually the three letters in front of the port name. Incoterms 2020 decides who books the vessel, who carries the risk once the container is loaded, and who pays if something goes wrong between the Egyptian quay and your warehouse door. For perishable cargo, where a single reefer failure can write off a full load, that allocation matters more than it does in most trades.

FOB, the default on Egyptian produce

Under FOB Alexandria or FOB Damietta, the exporter carries the goods through inland transport, terminal handling, export customs and loading on board. Risk transfers to the buyer once the container is on the vessel. From that point the buyer controls the ocean leg, the freight rate and any insurance.

FOB suits importers who already have a freight contract, who ship regularly on a named line, or who want visibility into the true product cost separate from freight. It also suits buyers on trade lanes where local forwarders quote better than an exporter can. The trade off is that the buyer has to manage booking timing against the harvest, and a missed booking means fruit sitting in cold store longer than it should.

CFR and CIF

CFR adds the ocean freight to the exporter’s account, so the price quoted is for delivery to the named destination port. Risk still transfers when the goods are loaded in Egypt, which is the point most first time buyers misread. A CFR price is not a guarantee of safe arrival. It is a freight arrangement.

CIF adds a minimum level of marine insurance, arranged by the seller for the buyer’s benefit. The default cover under Incoterms 2020 for CIF is Institute Cargo Clauses C, which is narrower than many importers assume and does not automatically cover reefer machinery breakdown. If you buy CIF and want proper cover on temperature controlled cargo, ask for Clauses A with a refrigerated machinery clause and expect the premium to be reflected in the price.

CFR and CIF are the right choice when the exporter has better freight rates on the lane than the buyer does, which on Gulf and East African routes out of Egypt is often the case. They are also simpler for buyers running a small number of containers per season.

DAP and the delivered options

DAP puts the goods at a named place in the destination country, ready for unloading, with the seller carrying risk the whole way. Import clearance and duty remain with the buyer. It gives the importer a single landed number and removes almost all coordination work, which is why some retail and food service buyers insist on it.

The catch is control and price. A DAP quotation prices in the exporter’s view of destination risk, and on a perishable cargo that risk premium is real. DAP also depends on the exporter having a reliable partner at destination. Ask who that partner is before you accept the term.

Practical guidance

Compare offers on a landed basis, not on the headline figure. Convert every quotation into cost per kilogram delivered to your cold store, including freight, insurance, terminal charges at destination, customs clearance and inland haulage. Confirm which party arranges pre-shipment inspection and who pays for it. Confirm the reefer set point and the temperature recorder in the sales contract rather than leaving it to the booking. Our note on export documentation for Egyptian produce lists the papers that should accompany each term, and the reefer loading and set point reference covers the technical side of the ocean leg.

PEI Trade quotes FOB, CFR, CIF and DAP on all 35 export crops from Alexandria, Damietta and Ain Sokhna. For a written comparison on your specific product and destination, message the export desk on WhatsApp at +20 10 9911 1918 with the product, volume and delivery point.