Why the shipping term matters
The shipping term on your quote decides who books the freight, who insures the goods, and where your cost and risk begin. Two quotes with different terms are not the same price — compare what each one actually includes.
The four terms that matter
- EXW (Ex Works): the factory's price is the goods at their door — you arrange pickup, export clearance, freight, insurance and import. Only workable if a forwarder or local partner can handle everything from the factory door outward
- FOB (Free on Board): the supplier gets the goods on board at the origin port and clears export; you book the main freight. The common choice when you have a forwarder or a sourcing partner arranging delivery
- CIF (Cost, Insurance and Freight): the supplier arranges freight and insurance to your port — but risk transfers to you once the goods are loaded in China, and import clearance and duties remain yours. Looks convenient; check whether the freight leg is competitively priced
- DDP (Delivered Duty Paid): delivered to your door with duties paid. The simplest for you — and the least visibility into what each leg cost
How to choose
- Have a freight forwarder or sourcing partner? FOB keeps you in control of the main leg
- Small volumes and want one predictable price to your door? DDP
- EXW only when you can handle everything from the factory door outward
- CIF — fine in principle, but get a comparison quote for the freight alone before accepting it
The shipping term is not paperwork detail. It decides who controls the freight — and who carries the risk while the goods move.
See also: air vs sea freight, import duties and customs and the shipping and compliance guide.