EXW, FOB, CIF and DDP describe different delivery responsibilities. Compare them using the agreed location, transport mode, cost scope and risk transfer point. A shipping price alone does not explain who must handle each part of the shipment.
You ask three suppliers for a price and receive EXW, FOB and DDP offers. One looks cheaper and another sounds easier because it promises delivery to your address. These offers cannot be compared by their total alone.
For a small business, the goal is a shipment arrangement you can understand and manage. Start with the actual route and responsibilities, then ask for a quote that describes them clearly.
What these trade terms can clarify
Incoterms® rules provide a framework for delivery, transport responsibilities, costs and risk. They do not replace product specifications, payment arrangements or the rest of your sales agreement. Use a named place or port and the intended rules version.
Treat “FOB China” or “DDP USA” as incomplete for planning purposes. Ask for the actual port, warehouse or delivery address, and get the scope confirmed in writing.
EXW: understand the work after collection
Under EXW, goods are made available at the named location, normally without loading onto the collecting vehicle. The buyer takes on the onward transport arrangements and export formalities.
Before accepting this basis, ask your logistics provider how collection, loading and export clearance will work in practice. If you need the seller to handle export clearance and hand goods to your carrier, discuss whether FCA better describes the arrangement.
FOB: the vessel is the delivery point
FOB is for sea or inland waterway transport. The seller handles export clearance and delivers on board the buyer-nominated vessel at the named shipment port; risk transfers there. The buyer arranges the main carriage.
For container shipments handed to a terminal before loading on board, discuss FCA with your freight provider. Do not use FOB automatically for air freight or every shipment leaving a Chinese factory.
CIF: freight paid does not mean destination risk
CIF is also for sea or inland waterway transport. The seller pays freight and provides the required insurance to the named destination port, while risk transfers when the goods are placed on board at origin.
That distinction matters if goods are damaged during the voyage. Ask about insurance cover and claims documents. Also clarify destination handling and the onward journey; a port named in the quote is not necessarily delivery to your premises.
DDP: confirm who can carry out the promised delivery
DDP puts export and import clearance, applicable duties and delivery to the named destination on the seller. Goods are delivered ready for unloading; unloading is generally the buyer’s responsibility.
Ask who will perform the destination clearance and what documents you will receive. A casual “all included” quote needs clarification, especially if the seller cannot explain its import arrangement. Confirm unusual delivery conditions and exclusions before choosing it.
Compare the same route and final destination
Prepare a cost list for the actual shipment: product, origin handling, main transport, insurance, destination handling, clearance, applicable import charges and final delivery. Identify what is included, excluded or still estimated.
Do not insert a guessed tax rate to make a quote look complete. Product classification, destination requirements and current charges need shipment-specific confirmation. A freight provider or customs broker can help establish those inputs.
A side-by-side starting point
| Term | Mode | Delivery and risk point | Key responsibility |
|---|---|---|---|
| EXW | Any transport mode | Goods available at the named place, not loaded | Buyer arranges onward transport and export formalities |
| FOB | Sea / inland waterway | On board the vessel at the shipment port | Seller clears export; buyer arranges main freight |
| CIF | Sea / inland waterway | On board at origin | Seller pays freight and required insurance to the named port |
| DDP | Any transport mode | Named destination, ready for unloading | Seller handles export/import clearance and applicable duties |
Use this as an orientation, then confirm the complete arrangement for your shipment. Specify the named location and Incoterms® 2020 where those rules are agreed.
Choose according to the responsibilities you can manage
A buyer with an established freight provider may want control over the main transport. A first-time buyer may prefer a more coordinated arrangement, provided the responsibilities and paperwork are clear. Neither preference settles the product-quality question.
Confirm packing, shipment release and inspection separately. A delivery term describes the shipment arrangement; it does not demonstrate that the products meet your specifications.
Bryan's view
I want the buyer to know who is responsible before the goods leave the factory. GCB can help coordinate factory packing and the questions that need to go to your logistics provider. The useful outcome is a clear handover, with someone responsible for each unresolved item.
Meet Bryan and see how we work
I'm Bryan, the founder of Global China Bridge, based in Beijing. I help overseas entrepreneurs and small businesses clarify and coordinate product and manufacturing work in China.
Helping your business move forward gives ours a foundation to grow. Work you entrust to us deserves careful attention, clear communication and follow-through on the tasks we agree.
Meet Bryan and read our story · Explore our sourcing stories
Questions buyers often ask
Is CIF the same as delivery to my warehouse?
No. CIF names a destination port. Confirm destination charges, clearance and onward delivery separately.
Can I use FOB for air freight?
FOB is a sea and inland waterway rule. Discuss a suitable rule for the actual transport mode.
Does the seller bear all transit risk under CIF?
No. Risk transfers on board at origin, even though the seller pays the main freight and arranges required insurance.
Is DDP automatically the best choice for a small order?
No. Check the seller’s ability to complete the promised arrangement, the included costs and the documentation before deciding.
Do these rules set payment terms?
No. Agree payment and its triggers separately in your sales arrangement.
What should I confirm before accepting a shipping quote?
Confirm the route, mode, named location, rules version, inclusions, exclusions and responsible parties.
Clarify the factory-to-delivery handover
Share the product, shipment size, destination and delivery offer you have received. The first conversation is free. We can discuss a defined coordination task and the questions your freight provider needs to answer.
Prefer email? Write to service@globalchinabridge.com.
Updated: October 9, 2026