Last updated: October 2026 · By the PandaRoads team in China
The three terms at a glance
| Term | Seller responsible until | Buyer takes over | Best for |
|---|---|---|---|
| EXW (Ex Works) | Goods packed at factory door | Everything: inland haul, export customs, freight, insurance | Buyers with a strong own forwarder in China |
| FOB (Free On Board) | Goods loaded on vessel at origin port, export cleared | Ocean freight, insurance, destination costs | Most importers: control freight, predictable origin costs |
| CIF (Cost, Insurance, Freight) | Goods arrive at destination port (freight+insurance paid) | Unloading, import customs, onward delivery | Buyers who want door-to-port simplicity, accept less control |
Who controls the freight (and why it matters)
- Under EXW/FOB you (or your forwarder) book the ocean leg — you see real freight rates and choose the carrier.
- Under CIF the seller books freight and embeds their margin in it; the “free” shipping is rarely free, and destination charges can surprise you.
- Control also determines who fixes problems: a rolled container or port congestion is your forwarder’s job under FOB, the seller’s under CIF — but so is their incentive to cut corners.
Cost traps to watch
- CIF markup: compare the CIF quote against FOB + an independent freight quote; the gap is the seller’s freight margin.
- EXW hidden inland costs: factory-door pricing looks cheapest until you add China inland haul + export customs.
- Destination charges under CIF: terminal handling and delivery-order fees at your port can exceed the “saved” freight.
Where a local team fits
We quote and verify the origin-side costs (inland haul, export handling, loading) so your FOB number is real, and we can inspect goods before loading — remote checks $129 per request, on-site $239 per day. See how to import from China and pre-shipment inspection.
Frequently Asked Questions
Which is cheaper, FOB or CIF?
On paper CIF can look cheaper because freight is bundled, but the seller’s margin is inside it. Quote FOB plus an independent forwarder rate to see the true cost; FOB usually wins for buyers with any volume.
Do I need my own freight forwarder for FOB?
Yes, or your agent arranges one. Under FOB the ocean leg is your responsibility, so you need a forwarder to book and manage it.
Is EXW ever a good idea?
Only if you have a trusted forwarder with strong China inland coverage who can beat the seller’s origin handling. Otherwise EXW pushes China-side logistics risk onto you for little gain.