An Incoterm on a glass bottle order answers two separate questions: where the risk of loss or damage moves from seller to buyer, and where the seller stops paying for carriage. Under FOB, CFR and CIF, risk passes once the goods are on board the vessel, so bottles found broken at your warehouse are your loss and your claim. Under DAP and DDP the seller holds that risk as far as the named destination. Pick the term by deciding who should carry transit risk, then make sure the same party controls the evidence a claim will need.
What a delivery term settles and what it leaves open
Every term has a risk point and a cost point, and they do not always coincide. On the sea terms they mostly move together. FOB leaves the main carriage with the buyer and transfers risk on board. CFR and CIF have the seller paying freight as far as the destination port, with risk still transferring on board; the only thing separating the two is whether the seller must also arrange insurance.
CPT and CIP split the two points on purpose. The seller pays carriage through to the named destination, yet risk transfers much earlier, at handover to the first carrier. A buyer who sees freight included all the way on a CIP quotation and concludes the seller is exposed all the way has misread it. Anything lost in transit after that first handover falls on the buyer, although the seller is still funding the freight and, with CIP, the insurance.
Three limits apply to every term:
- It is a delivery rule only. It does not describe the goods or their quality, set the payment method, or transfer ownership. It will not tell you when to pay or what happens if the glass arrives in the wrong colour.
- It needs a named place. FOB with no port, or DAP with no delivery address, is an abbreviation that each side will read its own way.
- It needs an edition. The 2020 rules changed points that matter for packaging, among them the insurance duty under CIP and the guidance on containerised handover under FCA. If a supplier writes CIF without a version and the two parties are working from different editions, the mismatch may only show when a claim is filed.
Two neighbouring questions sit elsewhere. How many bottles and how much weight a container takes, and how the pallet pattern changes that, is worked through in our CBM and container loading guide. Which document is produced at which stage, and who signs it off, is laid out in the order process for glass bottles.
Risk and cost under the nine terms quoted for glass
None of these terms alters what the glass itself costs. Each one only moves carriage, insurance, duty and risk between the parties, which is why two offers with an identical per-piece figure can land very differently.
| Term | Risk transfers | Who pays carriage, insurance and destination charges | Suitability for heavy, fragile glass | Usual misreading | Inspection and claim consequence |
|---|---|---|---|---|---|
| EXW | At the seller's premises, before loading | Buyer organises and pays for everything beyond the plant gate | Seldom a good fit, since the buyer cannot control loading | Loading is the buyer's responsibility although the buyer is absent | Inspect before collection and obtain a loading record |
| FCA | On handover to the carrier the buyer has named | Buyer pays main carriage; seller handles export clearance at origin | Workable, often the cleanest option for container cargo | Handled like FOB and paired with the wrong handover point | The handover receipt starts the claim trail; agree who witnesses it |
| FOB | Once on board at the named port | Buyer pays main carriage and insurance | Common and workable; the seller stays on risk until loading finishes | Thought to protect the buyer from the factory gate | After the on-board point the buyer claims on the carrier or its own insurer |
| CFR | Once on board at the named port | Seller pays freight to the destination port, with no duty to insure | Usable if the buyer buys cover for the sea leg | Freight paid is taken to mean risk carried | Transit damage is the buyer's claim and needs supporting documents |
| CIF | Once on board at the named port | Seller pays freight and arranges minimum insurance to the destination port | Widely used, though minimum cover may not respond to breakage | CIF insurance is taken to be all risks | Confirm cover level and claim evidence before sailing |
| CPT | On handover to the first carrier | Seller pays carriage to the named destination, with no duty to insure | Rare for glass, as the buyer faces a long uninsured leg | Risk is inferred from the freight instead of the handover point | Buyer insures from handover and claims on its own policy |
| CIP | On handover to the first carrier | Seller pays carriage and carries a wider insurance duty than CIF imposes | Stronger protection than CIF for fragile goods, but risk still moves early | Expected to work like CIF because the letters resemble it | Ask what the wider cover includes and who holds the policy |
| DAP | At the named destination, goods still on the arriving vehicle | Seller pays carriage to destination; buyer clears import and pays duty | Attractive, because the seller holds transit risk throughout | Unloading and import clearance are assumed to be part of it | Damage found on arrival is a seller-side loss; survey before unloading |
| DDP | At the named destination, ready for unloading | Seller pays carriage, import clearance and duty | Convenient on paper; the seller bears the most risk and cost | The all-in figure conceals duty assumptions and removes the buyer's duty control | Buyer still needs an arrival inspection and a defined claim window |
How to choose a term for your shipment
No term is best for every importer. FOB is the structure most often used by buyers who run their own forwarder and insurance, and because every supplier then quotes to one common handover point it keeps offers comparable. FCA is frequently the tidier choice for containers, since handover takes place when the goods are given to the carrier, not when they are on the ship. DAP suits a buyer who wants the seller on risk to the door while the import declaration stays in the buyer's name. DDP is the least work, but it folds duty assumptions into the price and takes the import treatment out of the buyer's hands.
For most orders the term is a matter of commercial preference, and the one that moves the goods with the least administration is fine. In three situations it should be decided on risk instead:
- One container carries a large share of the year's value. A pilot shipment of a new private shape can be the most valuable cargo in the programme. Handling damage to it holds up the launch, not just a delivery.
- The destination leg is long or passes between several carriers. Each extra handover is another moment for glass to chip and another party to dispute with.
- The buyer cannot realistically claim. That means no insurance of its own, no survey routine, no nominated forwarder and nobody internally who owns a claim.
The response is not automatically to push the seller to DDP. Decide who carries the risk, write it into the term with a named place, and check that the risk-bearing party also controls the evidence. A buyer using its own insurer and forwarder wants a term that hands over early and cleanly, with the loading and handover records forming the core of any claim file. A buyer who prefers to manage none of it wants a late handover, and should judge the offer on the whole delivery, not on the stretch that is easiest to compare.
Mixed consignments need one more check. When a shipment combines stock containers, closures and accessory items, the term applies to all of it, not to the headline item. How continuous programmes change loading, packaging and replenishment compared with a one-off batch is covered on our page about buying glass containers in bulk.
Who bears breakage, and what a claim needs
Glass is dense and does not absorb impact. The losses that actually occur are therefore seldom a whole container; they are chipped edges, star fractures in the base, cracked neck finishes, and the labour of sorting defective bottles off a pallet before the filler can run it. Liability for that kind of damage depends on who held the risk when it happened, as the table sets out, and not on either side's goodwill.
The difficulty is that the party on risk often lacks the information. With FOB and CIF, damage discovered at the warehouse is the buyer's, and recovery is sought from the carrier or the buyer's insurer. Showing where the damage happened relies on records made earlier:
- the container survey carried out ahead of loading
- loading photographs
- the seal number
- a destination survey done while the pallets are still intact
A verbal assurance that the last shipment arrived whole is not evidence of anything.
DAP and DDP look better for the buyer on paper, because the seller is on risk until the named place. It is not a free upgrade. What the seller can recover is capped by the cover and liability limits behind its forwarding contract, and a buyer who notices damage after the truck has driven off may be left documenting the loss in hindsight. The working rule is identical whichever side is on risk: inspect on arrival, photograph before put-away, and write down the count.
What CIF and CIP insurance actually covers
Only CIF and CIP, among the terms in common use, require the seller to arrange cargo insurance. CIF calls for a minimum level of cover, commonly written as Institute Cargo Clauses (C), with the insured amount at around one hundred and ten percent of the contract value in the contract currency. CIP, under the 2020 rules, calls for wider cover than CIF. No other term puts any insurance duty on the seller, and that includes DAP and DDP, whatever a buyer may assume about a seller who is paying the freight.
For glass, the question is which perils the policy responds to. A narrow named-perils form is designed around catastrophic events, not handling damage, so a claim for chipped bases or cracked necks can fall outside it even when the consignment was plainly damaged on the way. Do not infer the answer from the three letters. Put these points into the order before the goods are packed:
- which clause set applies
- the insured value and the currency it is written in
- who holds the policy
- how a claim is notified and surveyed
One exposure stays outside any cargo policy. Cover is normally written against what the goods are worth, and it rarely pays for a production stop when bottles arrive damaged and stock runs short. That gap is closed by the reserve held in your own programme, which is a planning decision and not something the trade term can supply.
Comparing quotations on landed cost
Why identical bottles produce different CIF figures
If two suppliers start from one ex-works figure for a given bottle and end at clearly different CIF numbers, the glass is seldom the reason. The gap sits in the freight and insurance layers, which should be separated before anything is compared:
- Freight basis. Ocean rates on one route differ by carrier, contract, booking window and season. A long-term contract rate and a spot rate on the booking day can be far apart.
- Weight versus volume. A container of glass can hit its weight limit before its cubic capacity is used, so the chargeable basis matters. Which limit binds depends on the bottle and the pack.
- Origin charges. Inland haulage, export documentation, terminal handling and origin surcharges may or may not be inside the rate. A low CIF is sometimes an FOB with a shorter inclusion list.
- Insurance basis. A minimum clause set and a wider one are not the same number, so a lower CIF may simply carry less cover.
- Destination charges. CIF ends at the destination port. Terminal handling, documentation, inspection, storage and inland delivery beyond it are the buyer's, and on some routes they exceed the ocean freight.
- Surcharges and validity. Bunker, currency, peak season and security surcharges move independently of the goods, and offers with different validity periods are not the same commercial object.
Compare the CIF figure together with a written list of everything still payable at destination, restated in one currency and for one delivery address. Suppliers are then measured on landed cost instead of on whichever part of the journey happened to be quoted.
What DAP and DDP leave out
Buyers who would sooner not manage a forwarder ask for DAP or DDP more and more, and for a first import programme the simplicity is worth something: the seller is on risk in transit and nobody on the buyer's team books sailings. What the buyer gives up is sight of the costs outside the goods themselves.
With DAP the buyer stays importer of record. The import declaration, duty, value added tax and any destination inspection are the buyer's. People call this door delivery, which is accurate, and then expect the door to include customs entry and unloading. Neither is included unless the contract says so.
With DDP the seller clears the goods and pays duty as well, so the figure looks complete. Two problems follow. Duty and tax assumptions are now buried in a commercial price with a margin on top, so the buyer cannot see or optimise the duty treatment, use a duty relief scheme, reclaim import tax where the jurisdiction permits, or readily challenge a generous assumption. And acting as importer of record in a foreign country is not always possible or desirable for a seller; where it cannot be done properly, the workaround leaves the declared importer and the real buyer mismatched, which surfaces later. DDP also does not normally include unloading unless the term names that place.
Experienced importers take a middle route. They keep the import declaration in their own name under DAP, or under FOB with a forwarder they control, and ask for carriage to be quoted separately so freight, insurance and duty appear as three numbers. Asking for that split adds nothing to the order, and it lets one layer change without reopening the rest.
Aligning inspection, claim and payment clauses with the term
A delivery term works only if the surrounding clauses match it.
Inspection. The inspector must reach the goods while risk still sits with the party you intend to hold responsible. With an early handover term that normally means inspection at the plant before loading, since damage after that is the buyer's. With a late handover term, still reserve the right to inspect at destination before unloading; damage recorded on arrival supports a claim far better than damage reported a week on.
Claims. Name the evidence, the person who must be present and the window. A usable file holds the container and seal numbers, the pre-loading survey, loading photographs, the arrival survey and a signed count taken before put-away. Each of those is produced at a step in the order process, so the delivery term and the process checklist are best drafted together.
Payment. The term is not a payment term and says nothing about when money moves; confusion tends to arise when the balance is tied to a delivery milestone instead of a document. Where payment runs through a documentary credit, the transport document must match the credit, and the term determines what that document shows. A credit demanding a freight prepaid bill of lading conflicts with a term that leaves main carriage to the buyer, and the bank will treat that as a discrepancy, not a clerical slip.
The term also fixes the point at which cubic metres and kilograms are measured, so settle it before the loading plan, not afterwards.
Buyers shipping to several destinations from one supplier do best with a single commercial term for the goods, carriage quoted separately for each destination, and one set of inspection and claim clauses that stays constant from port to port. The variables left are the destination and the order size. For a requirement built from stock shapes instead of a private mould, a wholesale programme of empty glass bottles from our stock collections is usually the quickest start, and there the delivery term is the main point still open.
If you would like a recommendation, tell us the destination port or delivery address, the approximate order size in bottles or containers, and whether you will use your own forwarder and insurance. We reply with a structural comparison: which term fits the way you want to carry risk and cost, what each leaves payable at destination, and how to word it beside your inspection and claim clauses. Freight, insurance and duty figures shift with the market, so they are confirmed against a live quotation when you enquire.
Frequently asked questions about Incoterms for glass bottles
Who pays when bottles break at sea under CIF?
The buyer. Risk moved when the cargo went on board, even though the seller paid the freight. Recovery is sought from the buyer's insurer or the carrier, and whether it succeeds depends on the clause set behind the policy, not on the term.
Is transit breakage covered by CIF insurance?
Not automatically. The seller's duty is minimum cover, and a narrow named-perils form built around major casualties can exclude handling damage such as chipped bases or cracked finishes. If you need breakage cover, get the clause set, insured value and claim procedure confirmed in writing before the vessel sails. The policy also does not name the buyer as holder unless that is arranged separately.
How do DAP and DDP differ on a bottle shipment?
The carriage is identical; the import treatment is not. With DAP the buyer is importer of record and pays duty, import tax and any destination inspection. With DDP the seller clears and pays duty, building its duty and tax assumptions and a margin into the price, and the buyer can no longer apply its own duty treatment.
Can the term be changed once the order is placed?
Yes, but the full cost and document package has to be restated, because the term governs who books carriage, who holds the insurance, what the transport document shows and who can claim. Changing it after loading is normally impractical. Any change should be agreed in writing along with the new price, evidence requirements and document list.
Are bottles only ever quoted FOB, CIF or DDP?
No, and a choice that narrow often means the freight has not been looked at. FCA is frequently the cleaner structure for containers. Where a buyer wants early handover with a long carriage paid by the seller, the C-terms serve that purpose, as long as the buyer accepts that risk stops at the earlier handover point and not at destination.
What happens if the two parties use different editions of the rules?
Quoting a term from one edition while the contract cites another, or using retired abbreviations, produces an agreement both sides think they understand and neither can rely on. State the edition next to the term and the named place.