If you’ve requested a quote from a supplier in China, you’ve probably seen prices listed as EXW, FOB, or CIF and wondered what the difference actually means for your order. These are Incoterms — standardized trade terms that define who is responsible for the goods, and who pays for what, at each stage of the shipping journey.
EXW (Ex Works)
Under EXW, the supplier’s responsibility ends the moment the goods are ready at their factory or warehouse door. Everything after that — loading, inland transport to the port, export customs, ocean freight, import customs — is on the buyer (or their agent) to arrange. EXW usually shows the lowest headline price, but it also means the most coordination work falls on you.
FOB (Free on Board)
With FOB, the supplier takes care of getting the goods from their location to the departure port and loaded onto the vessel. Once the goods are on board, responsibility shifts to the buyer, who then arranges and pays for ocean freight and everything on the receiving end. FOB is the most common term for buyers who already have their own freight forwarder or import process in place.
CIF (Cost, Insurance and Freight)
CIF goes a step further: the seller arranges and pays for the main ocean freight and minimum insurance to the destination port. The buyer still handles import customs clearance and final delivery on their end. CIF is convenient if you don’t yet have freight contacts of your own, but it’s worth comparing the freight portion against market rates — it isn’t always the cheapest option overall.
Which one should you choose?
If you’re new to importing and don’t have your own freight forwarder, FOB or CIF removes some of the logistics burden. If you’re working with a sourcing agent who already handles warehousing, consolidation and freight booking on your behalf, EXW pricing with the agent managing the rest can end up being the most cost-effective and transparent option, since you can see each cost line separately instead of a bundled figure.
There’s no single right answer — it depends on how much of the logistics chain you want to manage yourself versus hand off to someone else. Ask your supplier or agent to break down the full landed cost under more than one term so you can compare like for like.