Incoterms allocate cost and risk. They do not replace a freight contract. Yet many Pakistan trade disputes start with a PO that says FOB while both parties behave as if it were CIF.

FOB — Common on Pakistan Exports

Under typical FOB port of loading terms, the seller delivers goods on board the vessel nominated by the buyer (details depend on Incoterms version and named place). In practice:

Buyer often controls freight booking
Seller still must meet export clearance and delivery to the agreed point
Arguments erupt over who pays origin THC, documentation, and VGM

Write origin local charges explicitly. Do not assume “FOB” answers every line item.

CIF — Freight Prepaid Does Not Mean Trouble-Free

CIF includes freight and insurance to the named destination port in the classic sense — but destination unloading, customs, and inland haul are usually still buyer-side. Importers shocked by Karachi destination charges on “CIF shipments” misunderstood the term.

EXW — Maximum Buyer Control, Maximum Buyer Work

EXW puts export formalities risk on the buyer unless modified. Foreign buyers rarely want true EXW from a Pakistani factory without a forwarder who can actually execute origin export. If you sell EXW, confirm who files export GD and who books trucking.

LC + Incoterms Mismatch

Banks check documents against LC text. If the LC says CIF but you ship FOB (or vice versa), freight and insurance evidences will not match. Align sales contract, LC, and booking instructions before cargo moves.

How to Avoid Expensive Ambiguity

Name the place precisely (port / terminal), not only the term
List origin and destination local charges in the PO or booking note
Confirm who insures and for what value
Make sure the forwarder quotes the Incoterm you actually traded

MTX Practice

We ask for the Incoterm on every quote request. If your PO and your booking instructions disagree, we flag it before cut-off — fixing it after sailing is how claims and demurrage start.

Incoterms are short words. The charge codes on your invoice are long. Make them match.