International trade terms (Incoterms) – how to choose between EXW, FOB and CIF, and what it means for importing into Israel

International trade terms, known as Incoterms, are a central part of every import deal. Choosing the wrong terms can affect costs, responsibility and risk throughout the import process.

In this article we explain what the common terms mean and how to choose the right one for importing into Israel.

What are Incoterms and why do they matter?

Incoterms are international rules that define who is responsible for each stage of the deal: transport, insurance, risk and costs. They are not just technical terms but a management tool that directly affects pricing and control over the process.

EXW – working with the supplier from the gate

Under EXW the supplier’s responsibility ends at the factory. The importer is responsible for every stage of transport and export. It looks cheap on paper but requires experience and full logistics management on the importer’s side.

FOB – control with the right balance

Under FOB the supplier is responsible for bringing the goods to the port of origin and loading them. From that point responsibility passes to the importer. It is a common term that gives control over the shipping without getting tangled in inland logistics in the country of origin.

CIF – convenience with less control

Under CIF the supplier is also responsible for sea freight and insurance up to the destination port. It is a convenient term for beginners, but usually less transparent on costs and less flexible in managing the shipping.

How do you choose the right term?

The choice depends on experience, import volume and the level of control you want. Beginner importers usually prefer FOB or CIF, while experienced importers may choose EXW to manage the process themselves.

Summary

Trade terms are an integral part of good import planning. Understanding what lies behind EXW, FOB and CIF lets the importer make informed decisions, control costs and reduce risk.