Why Incoterms matter more for perishables
With non-perishable goods a delay is a cost. With fruit, a delay is lost quality. Incoterms define where risk passes from seller to buyer, but they do not by themselves cover quality deterioration in transit. Your contract must say what temperature and condition standards apply.
FOB: Free On Board
The seller delivers the goods on board the vessel at the Ecuadorian port; the buyer arranges and pays the ocean freight and bears risk from that point. Buyers with strong forwarder relationships often prefer FOB because they control carrier choice and reefer monitoring.
CFR and CIF
Under CFR the seller pays the sea freight to the named destination port, while risk still passes at loading. CIF adds insurance for the seller to arrange. Importers with less shipping experience like these terms for simplicity, but should check the insurance coverage level and who selects the carrier.
FCA and other options
FCA can fit when goods are handed over at a terminal or the seller's facility. For containerised cargo, buyers and sellers often use FCA instead of FOB because it matches how handover really happens. Use the 2020 version of the rules and name the exact place.
Practical advice
Whatever term you choose, specify the port, the temperature standard, inspection rights and the evidence needed for a claim. Ask your customs broker and legal adviser to review the final wording.
Buyer checklist
- Incoterms 2020 version and named place stated
- Cold-chain responsibilities written separately
- Insurance level and beneficiary defined
- Who selects the carrier and books the reefer
- Inspection and claim procedure in the contract
