EXW, FOB, CIF, DAP, DDP — Incoterms define where responsibility transfers. Understand them before you sign a supplier quote.
What Incoterms do
Incoterms are standardized trade terms published by the ICC. They allocate costs, risk and clearance duties between buyer and seller at each stage of shipping.
Common terms for China imports
- EXW (Ex Works): seller makes goods available; buyer handles everything from the factory.
- FOB (Free On Board): seller delivers on board the vessel at the Chinese port.
- CIF (Cost, Insurance, Freight): seller pays freight/insurance to destination port.
- DAP (Delivered At Place): seller delivers to destination, buyer pays duty.
- DDP (Delivered Duty Paid): seller prepays duty and tax — most hands-off for the buyer.
Which term fits you
New importers often prefer DDP or DAP to avoid setting up a local broker. Experienced buyers may use FOB or EXW to control costs with their own forwarder.