When you request a fabric or yarn quotation, you will see trade terms like FOB, CIF or EXW. These Incoterms decide who pays for freight, insurance and handling at each stage — and they can change your price by a lot. This guide explains the three terms you will meet most often when buying from China.
EXW — Ex Works
You take responsibility at the factory gate. The supplier makes the goods available at their premises; you arrange and pay all transport, export formalities and insurance.
- Lowest quoted price, highest buyer workload
- Good if you have your own freight forwarder in China
FOB — Free On Board
Supplier pays until goods are on the ship. The seller handles inland transport, export clearance and loading onto the vessel at the named port (e.g. FOB Qingdao). You pay ocean freight, insurance and everything after loading.
- The most common term for textile imports
- Clean division of responsibility — seller proves export, you handle sea leg
CIF — Cost, Insurance & Freight
Supplier pays freight and insurance to your port. The seller covers the sea freight and marine insurance up to the destination port. Risk transfers to you when goods are on board, but the seller arranges the transport contract.
- Convenient one-price quotation (goods + freight + insurance)
- You cannot control the shipping choice or routing
Which term should you choose?
| Situation | Recommended term |
|---|---|
| You have a forwarder and want the lowest price | EXW or FOB |
| You want a simple delivered price | CIF |
| First order, less experience with sea freight | CIF (or FOB with a trusted forwarder) |
| Bulk container orders, control over logistics | FOB |
DDP — the full-service option
Some suppliers also quote DDP (Delivered Duty Paid): the seller delivers to your door, covering freight, insurance and import duties. It is the most convenient but carries the highest risk and cost — and duties vary by market, so get the DDP price in writing.
How price compares between terms
For the same goods, you will see roughly: EXW < FOB < CIF < DDP. The difference is freight, insurance and (for DDP) duties. When comparing quotes, always confirm the Incoterm — comparing a CIF price with an EXW price is comparing apples and oranges.
Frequently asked questions
Does CIF include import duties?
No. CIF covers freight and marine insurance to the destination port only. Import duties are paid by the buyer at customs clearance.
Who pays for the truck to the port in FOB?
The seller pays inland transport to the named port as part of the FOB price.
Can we quote CIF to our port?
Yes — we quote FOB, CIF or DDP to major destinations. Send your destination port with the enquiry.
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