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EXW
Ex Works
You pay: Almost everything
Seller handles: Makes goods available at their factory
Risk transfers: At the factory door
Fits when: You have your own trucker + export agent in China. Rarely sensible for first-timers.
FOB
Free On Board
You pay: Ocean freight, insurance, destination customs
Seller handles: Delivers + export clearance, loads the vessel
Risk transfers: When the goods are on board the vessel at the named port of shipment.
Fits when: Sea or inland-waterway shipments where the buyer arranges the main carriage and import clearance.
CIF
Cost, Insurance & Freight
You pay: Destination customs + delivery
Seller handles: Freight + minimum insurance to your port
Risk transfers: When goods load at origin — but seller books the freight
Fits when: Looks simple, but the seller picks the carrier and the insurance is minimal. We'd rather quote you all-in.
DAP
Delivered At Place
You pay: Import duties + taxes + customs
Seller handles: Everything else, to your address
Risk transfers: At the buyer's disposal at the agreed destination, on the arriving vehicle, ready for unloading.
Fits when: You have an importer setup and want to control duty payments yourself.
DDP
Delivered Duty Paid
Check import rules
You pay: Contract price; unloading costs unless included in the carriage contract. Provide required import information.
Seller handles: Carriage to the agreed destination, export/transit/import clearance, and applicable duties and taxes.
Risk transfers: At the buyer's disposal at the agreed destination, on the arriving vehicle, ready for unloading.
Fits when: The seller can lawfully handle import clearance, and the parties agree the destination, documents and tax arrangement.

The honest summary

Choose an Incoterms rule by agreeing the delivery point, costs and responsibilities. The seller and buyer must be able to meet their obligations. DDP does not remove local import requirements. See exactly what our DDP includes →

Sources and scope

Summary of Incoterms 2020. State the chosen rule and named place or port in the sales contract. Local import requirements still apply.

Reviewed

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Questions buyers ask

+Which Incoterm should a first-time importer use?

There is no single rule for every first shipment. Choose according to transport mode, who can complete import formalities and the agreed delivery point. DDP can simplify coordination if the seller can legally perform import clearance; the buyer must still provide required information.

+Isn't FOB cheaper?

FOB looks cheaper because destination fees arrive on a separate invoice — after the ship has sailed. LCL shipments under FOB routinely collect $60+/CBM in destination charges that weren't in the headline rate. Compare all-in quotes, not headline rates.

+Why do suppliers love quoting EXW or CIF?

EXW makes your problem everything after the factory gate. CIF lets them book freight with a margin and pass you a minimum-insurance shipment. Both shift work and markup onto you.

+What does DDP from Linfon include?

DDP (Delivered Duty Paid) assigns the seller responsibility for carriage and export, transit and import clearance to the agreed destination, including applicable duties and taxes. We coordinate the services set out in your written quote. Before booking, we confirm the importer of record, required registrations and documents, and any product restrictions for your destination. DDP does not remove local import requirements.

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