Have you ever seen the words “EXW”, “FOB” and “CIF”? They actually are shipping terms (also known as incoterm) for describing seller’s and buyer’s obligations for international shipping. Currently, we can do 4 popular shipping terms, which are EXW, FOB, CIF and DAP.
EXW (Ex-Works) means the seller makes the goods available at their own warehouse or factory, but they are not responsible for loading the goods onto a vehicle for the buyer, nor are they involved in export clearance. The buyer is responsible for picking up the goods and handling all associated logistics, including transportation, loading, and export-related costs.
FOB (Free On Board) denotes the obligation of the seller to transport the goods onto the ship at the designated port of departure. It is the buyer's decision to arrange and cover the shipping and freight expenses. The transportation risk will move from the seller to the buyer once the goods are delivered and are safely onboard the ship. Importantly, under FOB terms, the seller takes care of export customs clearance procedures and cost.
CIF (Cost, Insurance, & Freight) means the seller is responsible for delivering the goods, ensuring they are cleared for export, and loading them onto the vessel at the designated port of departure. The seller also covers the transportation costs of getting the goods to the destination port and secures minimal insurance coverage for the goods during their journey to the destination port.
DAP (Delivered At Place) indicates the seller’s obligation is to transport the goods to the destination country as specified by the buyer, and these goods must be prepared for unloading at a location (can be buyer’s door address) outside of a designated terminal or transportation facility. The buyer assumes responsibility for handling import customs clearance and paying any applicable tariffs.
If you are an experienced importer, FOB might be your most commonly used option. But if you are importing goods from China for the first time or are not very familiar with the shipping process, DAP could be a more suitable option for you.
Please do not worry about import customs clearance matters. Our freight forwarder will stay in contact with you throughout the process and assist you with customs clearance.
In our quotations, we will decide whether to include shipping costs based on whether you provide a delivery address. If we see a delivery address, we will provide a DAP price. However, if we do not know the delivery address, we will provide an EXW price.
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