Incoterms are rules published by the International Chamber of Commerce; the current version is Incoterms 2020. They define who organises and pays transport, who handles export and import formalities, and when risk passes from seller to buyer. They do not govern ownership, payment terms or price. Always state the rule, place and version, e.g. “FOB Ningbo Incoterms 2020”.
The main rules for China imports
| Rule | Main carriage paid by | Risk transfers | Verdict |
|---|---|---|---|
| EXW | Buyer | At the factory | Cheapest price, most work — check export clearance |
| FCA | Buyer | Handover to buyer’s carrier | Ideal for any mode |
| FOB | Buyer | On board at origin port | Most common for sea freight |
| CFR / CIF | Seller | On board at origin port | Little control over destination costs |
| DAP | Seller | At destination | Import duties and VAT are yours |
| DDP | Seller | At destination, duties paid | Convenient but needs scrutiny |
FOB and FCA: the importer’s best friends
With FOB, the supplier delivers export-cleared goods on board the vessel your forwarder booked, so you control freight and destination costs. FCA works the same way for every mode, including rail, air and road, and for groupage delivered to your forwarder’s warehouse. Using FOB for air freight is a common mistake: use FCA instead.
EXW, CIF and DDP: watch out
- EXW puts export clearance on the buyer; in practice your forwarder or the supplier must handle it. Our door-to-door services include supplier pickup and the Chinese export declaration.
- Under CIF, the seller only has to buy minimum cover (Institute Cargo Clauses C). For valuable goods, take all-risks cover: ours costs 0.35% of value, minimum €35.
- Under DDP, the supplier must be able to clear goods and handle VAT in France. For small shipments, our DDP parcel lines give the same comfort from €2.40/kg.
Which one should you choose?
Regular volumes with your own forwarder: FOB for sea, FCA for rail, road and air. Several suppliers in one region: EXW or FCA to your forwarder’s consolidation warehouse. Small volumes: a forwarder DDP line rather than a supplier DDP.
