What Incoterms are
Incoterms are standard trade terms published by the International Chamber of Commerce. The current version is Incoterms 2020. Each term sets out where the seller's job ends and yours begins: who books and pays for transport, who arranges insurance, who handles export and import clearance, and at what point the risk of loss passes to you.
Incoterms do not decide the price of the goods or when ownership passes. They govern delivery, cost and risk. Always state the term with a named place, for example "FOB Ningbo" or "CIF Tema".
The main terms, from a Ghana importer's side
- EXW (Ex Works). You collect from the supplier's premises and handle everything, including export clearance in the seller's country. Maximum control, but export formalities abroad can be hard to manage from Ghana.
- FCA (Free Carrier). The seller clears the goods for export and hands them to your carrier at a named place, such as their warehouse or your forwarder's depot. A practical alternative to EXW, and well suited to LCL and air freight.
- FOB (Free On Board). The seller clears export and loads the goods on the vessel at the named port. From there, freight, insurance and everything in Ghana are yours. Used for sea freight only.
- CFR (Cost and Freight). The seller pays sea freight to Tema, but risk passes to you once the goods are on board at origin.
- CIF (Cost, Insurance and Freight). As CFR, plus the seller buys minimum insurance cover for you. Risk still passes at the origin port.
- DAP (Delivered at Place). The seller delivers to a named place in Ghana, ready for unloading. You handle import clearance, duty and taxes.
- DDP (Delivered Duty Paid). The seller delivers to you with import duty and taxes paid. The most work for the seller, and the hardest to do properly into Ghana.
Who pays and who carries the risk
| Term | Export clearance | Main freight | Insurance | Risk passes to you | Ghana duty and clearance |
|---|---|---|---|---|---|
| EXW | You | You | You | At seller's premises | You |
| FCA | Seller | You | You | When handed to your carrier | You |
| FOB | Seller | You | You | On board at origin port | You |
| CFR | Seller | Seller | You | On board at origin port | You |
| CIF | Seller | Seller | Seller (minimum cover) | On board at origin port | You |
| DAP | Seller | Seller | Seller's choice | At named place in Ghana | You |
| DDP | Seller | Seller | Seller's choice | At named place in Ghana | Seller |
Whatever the term, Ghana Customs works out duty on the CIF value of the goods, so freight and insurance are added to an FOB or EXW invoice for the assessment. Read Ghana import duty explained or try the import duty calculator.
Why FOB or FCA often works out cheaper
When you buy FOB or FCA and appoint your own freight forwarder, you choose the shipping line, see the real freight rate and know exactly what charges will be raised in Ghana. Your forwarder can also plan clearance at Tema before the ship arrives.
With CFR or CIF, the seller chooses the line and the freight is built into the goods price. The figure looks attractive, but the seller's agent at destination may add high local charges at Tema before releasing the delivery order. Those charges are paid by you, often at short notice, while port storage runs. A low CIF price can hide a high landed cost.
Compare the full landed cost, not the invoice. Our guide to container shipping costs to Ghana shows what goes into it, and for buyers in Asia, see shipping from China to Ghana.
DDP pitfalls in Ghana
DDP sounds simple: the seller handles everything and you just receive the goods. In practice it rarely works cleanly into Ghana. A foreign seller has no Ghana TIN and cannot easily act as importer of record, so import duty and VAT usually still need a local party to declare and pay them.
What often happens is that a "DDP" quote relies on an agent in Ghana who clears the goods in someone else's name or on uncertain values. That can lead to valuation queries, goods held at the port, and you losing input VAT you could otherwise reclaim. If a seller offers DDP, ask who will be the importer on the declaration and how duty will be paid. For most business imports, DAP or FOB with your own clearing agent is safer.
Choosing the right term
- Full containers by sea: FOB at the loading port, with your own forwarder. See sea freight to Ghana.
- LCL and air freight: FCA at the supplier's warehouse or the forwarder's depot. See FCL vs LCL and air freight to Ghana.
- First orders from a new supplier: FCA or FOB, so you are not relying on the seller's choice of carrier.
- You want it delivered to your door: buy FOB or FCA and ask your forwarder for door-to-door shipping, rather than DDP.
Send us your supplier's quote and the Incoterm, and we will price the freight, clearance and delivery so you can compare. Request a quote.
Questions
Which Incoterm is best for importing into Ghana?
For most importers, FOB for full containers by sea and FCA for LCL or air freight, with your own forwarder and clearing agent. You control the carrier, the freight cost and the timing of clearance.
Is CIF or FOB better for Ghana importers?
FOB usually gives better control and a clearer total cost. CIF can look cheaper on paper, but the seller's agent at Tema may add destination charges you cannot negotiate.
Does Ghana Customs charge duty on the FOB or CIF value?
Duty is calculated on the CIF value: the cost of the goods plus insurance and freight to Ghana. If you buy FOB, freight and insurance are added for the assessment.
Can a foreign supplier ship DDP to Ghana?
It is possible but difficult. A foreign seller cannot easily be the importer in Ghana or pay duty and VAT directly, so a local party is still involved. Ask exactly who will declare the goods before agreeing to DDP.
What is the difference between FOB and FCA?
FOB applies to sea freight and passes risk once the goods are on board the vessel. FCA passes risk when the goods are handed to your carrier at a named place, so it suits containers, LCL and air freight.
Are Incoterms 2020 still current?
Yes. Incoterms 2020 is the current edition published by the International Chamber of Commerce. Name the version and the place in your contract, for example FOB Shanghai Incoterms 2020.
Talk to our customs team.
Send your documents or cargo details and we will reply with a full quote: freight, clearance and delivery on one page.