Shipping & costs
EXW vs FOB vs CIF When Buying From China
Compare EXW, FOB and CIF when buying from China: freight costs, risk transfer, insurance and destination charges. Plan your shipment with MedinChina.
The key takeaway
Compare Incoterms by both cost and risk. Under CIF the seller pays freight to the named destination port, but cargo risk transfers when goods are on board at origin—not when they arrive.
What EXW, FOB and CIF allocate
Incoterms® 2020 are ICC rules that allocate delivery obligations, costs and risk between seller and buyer. Include the chosen rule, precise named place or port and version in the contract. They do not determine ownership, payment terms or whether your goods meet import requirements.
| Rule | Seller’s delivery / risk transfer | Main carriage |
|---|---|---|
| EXW — Ex Works | Goods available at the named place, not loaded on the collecting vehicle. | Buyer arranges and pays. |
| FOB — Free On Board | Goods on board the vessel at the named shipment port. | Buyer arranges and pays. |
| CIF — Cost, Insurance and Freight | Goods on board at origin; seller pays freight and required insurance to the named destination port. | Seller arranges and pays to the named destination port. |
EXW can leave more work than the low price suggests
EXW often gives the lowest-looking supplier quotation because transport tasks remain largely with the buyer. Loading, collection and export clearance arrangements need particular attention. A foreign buyer may face practical difficulties arranging export formalities in China.
Ask your forwarder whether FCA at a precisely named place would better reflect the handover and export arrangements. Do not change only the three-letter label: confirm who performs each task and how it is charged.
FOB and CIF are for sea or inland waterway transport
Do not use FOB or CIF for an air shipment. For containerised goods handed over at a terminal before loading, FCA is often a more suitable way to describe delivery. Choose the rule with the supplier and forwarder based on the actual transport process.
Under CIF, the seller must procure the required insurance, but the default cover under Incoterms 2020 is limited cover equivalent to Institute Cargo Clauses (C), subject to the rules. Ask whether broader coverage is needed for your cargo. CIF does not automatically include import duties, taxes or every destination handling charge.
Compare the full journey before choosing
Request itemised quotes using the same cargo weight, dimensions, route and timing. Confirm origin charges, main freight, insurance, destination charges, customs brokerage and final delivery. A low CIF quote can still leave significant arrival costs.
MedinChina can help coordinate supplier quotations and logistics planning from China, clarify what is included and identify information your destination broker needs. Share the quotation, packing details and delivery address before choosing an Incoterm.
Frequently asked questions
Does CIF mean delivery to my warehouse?
No. CIF names a destination port, and risk transfers on board at origin. Inland delivery, customs clearance and arrival costs must be clarified separately.
Which Incoterm is always cheapest?
None. Compare the same end-to-end shipment and the control you need over transport. The supplier’s quoted price alone is not the landed cost.