You receive two quotations from overseas suppliers.

Supplier A offers the product for $10 per unit.

Supplier B offers the same product for $10.80.

Naturally, you choose Supplier A.

A few weeks later, however, you discover that your “cheaper” supplier’s quotation did not include several costs you assumed were covered.

You now need to arrange transportation from the supplier’s warehouse.

You need to coordinate export procedures.

You need to pay additional handling charges.

You need to arrange international freight.

Suddenly, the supplier who appeared to be cheaper is no longer cheaper.

This is one of the most common mistakes made by new importers.

The problem is not necessarily that the supplier was dishonest.

The problem is that the two quotations may have been based on different Incoterms.

Incoterms determine how responsibilities, costs, and risks are divided between buyers and sellers in international trade.

For Kenyan importers, understanding them is essential.

Whether you are importing electronics from China, machinery from the United States, clothing from the United Kingdom, or commercial goods from Dubai, the Incoterm attached to your quotation can significantly influence your actual landed cost.

At Clearon Logistics, we regularly work with businesses at different stages of the international shipping process. One thing we have learned is that many import problems begin before the goods are even purchased.

They begin when the buyer accepts a quotation without fully understanding what it includes.

What Are Incoterms?

Incoterms are internationally recognised commercial terms developed by the International Chamber of Commerce (ICC).

They are used to clarify responsibilities between buyers and sellers in international transactions.

They help answer questions such as:

Who arranges transportation?
Who pays for certain transport costs?
Who handles export procedures?
When does the risk transfer from seller to buyer?
Who is responsible for importing the goods?
Who arranges delivery to the final destination?

The key point is that an Incoterm is not simply a shipping method.

It is a framework that defines responsibilities within the transaction.

This is why Kenyan importers should never compare supplier prices without first checking the Incoterm attached to each quotation.

Why the Same Product Can Have Completely Different Prices

Imagine a Kenyan importer is buying 1,000 units of a product from China.

Supplier A quotes:

$10 per unit EXW.

Supplier B quotes:

$11 per unit FOB.

Supplier C quotes:

$12.50 per unit CIF Mombasa.

At first glance, Supplier A appears to be the cheapest.

But the prices represent different levels of responsibility.

The EXW (Ex-works) price may leave the buyer responsible for moving the goods from the supplier’s premises and arranging much of the export and transportation process.

The FOB (Free on Board) price generally includes more of the origin-side logistics.

The CIF (Cost, Insurance, Freight) price includes the cost of transporting the goods to the named destination port, although it does not mean every cost associated with getting the goods to the importer’s premises is included.

Comparing these three prices directly is therefore misleading.

The correct question is not:

“Which supplier has the lowest price?”

It is:

“Which supplier offers the lowest total landed cost for the same scope of responsibility?”

EXW: Ex Works

EXW is often attractive because the supplier’s quotation can appear very low.

Under an EXW arrangement, the seller generally makes the goods available at an agreed location, such as a factory or warehouse.

The buyer takes on much more responsibility for the movement of the goods.

This can include arranging:

Collection from the supplier.
Inland transportation.
Export-related processes.
International freight.
Import procedures.
Customs clearance.
Final delivery.

For experienced importers with established logistics networks, EXW can sometimes provide flexibility.

For new importers, however, it can create unexpected complexity.

Example

Suppose your supplier quotes:

1,000 units × $10 = $10,000 EXW.

You may then need to account for additional costs such as:

Collection from the supplier.
Transport to the export point.
Origin handling.
Export-related charges.
International freight.
Insurance where applicable.
Kenyan import taxes and charges.
Customs clearance.
Inland transportation.

The $10,000 quotation is therefore not your final import cost.

It is only one component.

When EXW May Make Sense

EXW may be appropriate for businesses that:

Have experienced logistics partners.
Understand the export process.
Can coordinate origin transportation.
Want greater control over logistics.

For smaller importers, the additional complexity may outweigh the apparent price advantage.

FOB: Free On Board

FOB is widely used in international sea freight.

Under a typical FOB arrangement, the seller is responsible for delivering the goods on board the vessel at the agreed port of shipment and completing the relevant export formalities.

The buyer generally takes responsibility for the main international transportation and subsequent costs.

This can make FOB easier to understand for many importers.

Example

Your Chinese supplier offers:

Product value: $20,000 FOB Shanghai.

This generally means the supplier’s responsibility extends further than an EXW quotation.

The buyer still needs to consider:

Ocean freight.
Insurance, if required.
Destination port charges.
Customs clearance.
Import duties and taxes.
Inland transportation.
Final delivery.

The key advantage is that the buyer has greater visibility and control over the main international freight arrangement.

CIF: Cost, Insurance and Freight

CIF is another common term encountered by Kenyan importers.

Under CIF, the seller arranges and pays for the cost of the goods, insurance, and freight to the named destination port.

For shipments to Kenya, this may mean the quotation includes transportation to the Port of Mombasa or JKIA airport.

However, importers must be careful.

CIF does not mean:

“Everything is paid for until the goods arrive at my warehouse.”

There may still be significant costs after the shipment reaches the destination.

These can include:

Destination port charges.
Customs clearance.
Import duties and taxes.
Documentation charges.
Transport from the port.
Delivery to the final destination.

This is why a CIF quotation should never automatically be interpreted as the final landed cost.

DDP: Delivered Duty Paid

DDP generally places much more responsibility on the seller.

The seller is responsible for arranging delivery to the agreed destination and handling import-related obligations, including duties and taxes, subject to the specific transaction and local legal requirements.

For a buyer, DDP can appear attractive because it simplifies the process.

However, importers should understand exactly what the supplier is offering.

Questions worth asking include:

Where exactly is the delivery point?
Are all import duties included?
Are taxes included?
Is customs clearance included?
Is final delivery included?
Are there additional destination charges?

A quotation that says “DDP” should still be examined carefully.

The word itself does not eliminate the need for clarity.

Why Kenyan Importers Should Be Careful With DDP

DDP transactions can be convenient, but they may require additional scrutiny when importing into Kenya.

The importer should understand who is acting as the importer of record where applicable, who is responsible for customs compliance, and whether the arrangement is properly structured under Kenyan requirements.

A low-cost DDP offer may look attractive, but if the arrangement lacks transparency, the importer may have difficulty understanding how customs values, taxes, documentation, and compliance have been handled.

Convenience should never replace due diligence.

The Biggest Mistake: Comparing Incoterms as If They Are Prices

Imagine these three offers:

Supplier A

$10,000 EXW

Supplier B

$10,800 FOB

Supplier C

$12,000 CIF Mombasa

A beginner might immediately choose Supplier A.

An experienced importer asks a different question.

“What will each option cost me from the supplier’s premises all the way to my warehouse in Kenya?”

Only after calculating the full cost can you make a meaningful comparison.

A Simple Landed Cost Example

Suppose you import goods valued at $20,000.

Your estimated costs are:

Product value: $20,000

International freight: $2,000

Insurance and related costs: $200

Other applicable logistics costs: $800

For illustration:

Estimated landed cost before applicable Kenyan import taxes and duties = $23,000

If Supplier A’s quotation is EXW at $20,000 and Supplier B’s quotation is CIF at $22,500, Supplier B may initially appear more expensive than the EXW option.

But after adding the costs you would incur under EXW, the difference could disappear—or even reverse.

The lesson is simple:

Never make a supplier decision based on the product quotation alone.

Incoterms and Risk Are Not the Same as Cost

Another common misunderstanding is assuming that the party paying for transportation is automatically the party carrying the risk at every stage.

Costs and risk are related, but they are not identical.

This distinction matters.

An importer may assume:

“The supplier paid for the freight, so the supplier is responsible for the cargo until it reaches Kenya.”

That assumption may be incorrect depending on the Incoterm.

Understanding when risk transfers is critical when dealing with:

Cargo damage.
Loss.
Delays.
Insurance claims.

Importers should understand both the cost responsibilities and the risk transfer point.

Incoterms Should Be Part of Your Procurement Strategy

Incoterms should not be selected randomly.

They should reflect your business capabilities.

A large importer with established logistics relationships may prefer an arrangement that gives it greater control.

A smaller business may prefer a structure that simplifies origin logistics.

The right choice depends on:

Shipment size.
Product type.
Supplier location.
Importer’s experience.
Logistics capabilities.
Cash flow.
Risk tolerance.

There is no universally best Incoterm.

There is only the Incoterm that makes the most sense for a specific transaction.

Consolidation Makes Incoterm Understanding Even More Important

Consider a Kenyan importer buying from five suppliers in China.

Each supplier offers different terms.

One offers EXW.

Another offers FOB.

Another offers a factory-gate quotation.

Another offers delivery to a warehouse.

The importer now needs to coordinate multiple logistics arrangements.

For smaller shipments, cargo consolidation can simplify the process.

Suppliers can deliver goods to a designated warehouse in China, where the cargo is received and consolidated before shipment to Kenya.

At Clearon Logistics, this is one of the ways we support smaller importers and businesses purchasing from multiple suppliers.

Instead of managing every shipment independently, cargo can be coordinated through our warehouse in China and shipped as consolidated cargo to Kenya.

This can make the logistics process easier to manage while giving businesses greater visibility over the movement of their goods.

Large Shipments Require a Different Approach

For larger shipments, including FCL cargo and larger air consignments, businesses may require a more structured logistics process.

This can involve:

Confirming cargo readiness.
Scheduling vessels or flights.
Booking freight.
Coordinating documentation.
Arranging export processes.
Tracking shipment progress.
Preparing for customs clearance in Kenya.
Coordinating cargo release.
Arranging final delivery.

At Clearon Logistics, we work with clients throughout these stages, depending on the nature of the shipment and the agreed logistics arrangement.

The objective is to ensure that the shipping strategy aligns with the commercial transaction.

Questions Every Kenyan Importer Should Ask Before Accepting a Quotation

Before placing an order, ask:

What Incoterm Is Being Used?

Never assume.

What Location Is Named?

EXW at a factory is different from EXW at a warehouse.

What Costs Are Included?

Request a clear breakdown.

Who Arranges Export Procedures?

Confirm responsibilities before production begins.

Who Books International Freight?

Do not assume the supplier is doing it.

Where Does the Seller’s Responsibility End?

This should be clearly understood.

When Does Risk Transfer?

This is especially important for insurance and cargo damage.

What Costs Will I Still Pay in Kenya?

Understand the destination-side costs before committing.

Who Handles Customs Clearance?

Confirm this in writing.

Who Delivers the Cargo to My Final Location?

Port arrival is not the same as final delivery.

These questions can prevent expensive misunderstandings.

Why Clearon Logistics Encourages Importers to Plan Before They Buy

Many logistics problems can be avoided before the purchase order is placed.

Before committing to a supplier, Kenyan importers should understand:

The Incoterm.
The cargo dimensions.
The shipment size.
The expected delivery timeline.
The likely freight method.
The customs implications.
The final destination.

This allows logistics decisions to be incorporated into procurement decisions.

At Clearon Logistics, we help businesses coordinate international shipping from China, the United Kingdom, the United States, Dubai, and other sourcing markets.

For smaller cargo, our consolidation model allows suppliers to deliver goods to our warehouse, where shipments can be consolidated and transported to Kenya.

For larger shipments, we coordinate direct shipping arrangements with clients through the necessary stages of freight booking, documentation, customs clearance, and final cargo release.

This approach helps businesses move from simply buying products to managing the entire supply chain more effectively.

Final Thoughts

Incoterms may appear to be technical abbreviations buried at the bottom of a supplier quotation.

They are not.

They can influence your costs, responsibilities, risks, and logistics strategy.

A supplier offering the lowest product price may not offer the lowest landed cost.

A quotation that appears more expensive may actually provide better value once transportation and other responsibilities are considered.

The most successful Kenyan importers therefore look beyond the product price.

They evaluate the entire transaction.

They understand the Incoterm.

They calculate the landed cost.

They assess the risks.

They plan the logistics.

And they make purchasing decisions based on the complete picture.

Before you place your next international order, don’t just ask:

“How much does the supplier charge?”

Ask:

“What exactly am I responsible for from the moment I place this order until the goods reach my business in Kenya?”

That question could save you far more money than negotiating another few cents off the product price.

At Clearon Logistics, we help Kenyan businesses navigate the complex journey from overseas suppliers to final delivery through international freight coordination, cargo consolidation, customs clearance, and logistics support.

Because successful importing isn’t simply about buying cheaply.

It’s about understanding exactly what you’re buying—and everything that happens after you buy it. Get in touch with us today!