An importer calls on a Tuesday, upset. The supplier quoted CIF Miami, so the importer assumed delivery to the warehouse was included. The container has been sitting at the terminal for four days, demurrage is running, and nobody has booked a truck. The supplier’s obligation ended when the vessel arrived.
This happens constantly. Incoterms are the single most misread piece of paperwork in importing, and the gap they leave is almost always the drayage leg – the truck move from the marine terminal to the first inland stop.
What Incoterms actually cover
Incoterms are published by the International Chamber of Commerce and define three things between buyer and seller: who arranges transport, who pays for it, and where risk of loss transfers. They are not a full contract and they say nothing about payment terms, title, or who your customs broker is.
The critical detail for drayage: most common Incoterms hand off responsibility at the port, not at your building. Everything after that handoff is yours to arrange.
The terms you will actually see on a Miami import
FOB (Free On Board) – port of origin
The seller loads the container onto the vessel at origin. From that moment, ocean freight, insurance, customs clearance, terminal charges and drayage are the buyer’s problem. FOB is the most transparent term for a US importer because you control the routing and you see every cost. It is also the term where new importers most often forget to book a truck before the last free day.
CIF and CFR – the one that causes the most confusion
Under CIF, the seller pays ocean freight and cargo insurance to the named destination port. That is where it stops. The seller does not pay terminal handling at destination, does not pay customs duties, and does not pay drayage. “CIF Miami” means the container reaches PortMiami. Getting it out of the terminal and to your dock is entirely on you.
There is a second trap with CIF: the seller chooses the carrier, which often means the buyer inherits an unfavorable free-time allowance and destination charges that were never quoted. If you are getting CIF pricing that looks cheap, budget for destination charges you did not see.
DAP (Delivered At Place)
The seller delivers to a named place – usually your warehouse – and pays the drayage to get there. The buyer still handles import clearance and pays duties and taxes. This is the term where the seller is genuinely arranging the truck, often through a forwarder who subcontracts a local drayage carrier.
One caution: under DAP, the seller’s agent picks the drayage carrier, and you have no relationship with the driver showing up at your dock. If your receiving requires an appointment, a liftgate, or a specific delivery window, that has to be communicated up the chain before the container is dispatched.
DDP (Delivered Duty Paid)
The maximum seller obligation. The seller handles everything including customs entry, duties, and final delivery. It is convenient, but for US imports it requires the foreign seller to act as importer of record, which many are unwilling or legally unable to do. DDP quotes into the US are frequently priced with a large risk margin, and when the entry goes sideways the buyer often ends up involved anyway.
EXW (Ex Works)
The buyer collects from the seller’s factory door. Every leg is yours, including origin drayage and export clearance in the origin country. EXW gives you total control and total exposure.
Where the drayage gap opens
Under FOB, CFR and CIF, the responsibility for moving the box off the terminal sits with the buyer. The problem is timing: free time at the terminal typically starts when the container is discharged and available, not when you realize it is your job. Miss the last free day and demurrage accrues per container per day, and it does not care whose misunderstanding caused it.
The practical fix is simple. As soon as you receive the arrival notice, confirm two things: who is booking the truck, and what the last free day is. If the answer to the first question is “I thought the supplier was,” you have a CIF problem and you need a carrier dispatched today. Our overview of container drayage services covers what we need from you to dispatch on short notice.
Incoterms do not change who pays terminal charges
Terminal handling, chassis, and port fees at destination are governed by the ocean carrier’s tariff and the terminal’s schedule, not by the Incoterm. An Incoterm decides who is contractually responsible for arranging and funding a leg – it does not waive a charge. If your CIF supplier tells you destination terminal handling is included, ask to see it on the bill of lading.
Choosing a term that fits how you actually operate
If you import regularly into South Florida and you have a drayage carrier you trust, FOB is usually the best value. You control the ocean carrier, you control free time, and you control the truck. You will see every charge, which feels like more cost but is usually less.
If you import occasionally and do not want to manage the destination leg, DAP is reasonable – but insist on knowing the delivery carrier and give your receiving requirements in writing.
If you are quoting DDP because you want one number, price it against FOB plus a real destination quote before you accept. The difference is often larger than importers expect. A drayage quote for the destination leg takes minutes and makes the comparison honest.
A short pre-shipment checklist
- Confirm the Incoterm in writing on the purchase order, not just the invoice.
- If the term ends at the port, identify your drayage carrier before the vessel sails.
- Ask the seller which ocean carrier and how much free time is included.
- Send your delivery address, receiving hours and appointment requirements to whoever is arranging the truck.
- Track the vessel so the arrival notice is not the first time you think about the truck. Our shipment tracker gives you live status once the move is booked.
Frequently asked questions
Does CIF include delivery to my warehouse?
No. CIF covers ocean freight and insurance to the named destination port only. Terminal charges, customs clearance, duties and the truck move from the terminal to your warehouse are the buyer’s responsibility.
Which Incoterm is best for a first-time importer into Miami?
FOB origin port is usually the best starting point. You control the ocean carrier, you see the free-time allowance, and you can arrange drayage with a local carrier before the container lands, which is the main way new importers avoid demurrage.
Can the Incoterm protect me from demurrage?
Only indirectly. Under DAP or DDP the seller is responsible for moving the container, so demurrage caused by a late pickup is generally theirs. Under FOB, CFR or CIF it is yours from the moment the container is available. The Incoterm assigns responsibility – it does not stop the clock.