In international trade, three little letters can change everything. Shipping terms decide who pays for
what, who takes the risk, and where responsibility shifts from seller to buyer. At CG OUTDOOR
FURNITURE, we sometimes meet clients who are new to these terms, so here’s a clear guide to help
you understand the most common ones: EXW, FOB, CIF, DAP, and DDP.
Quick Comparison Table
| Term | Seller’s Responsibility | Buyer’s Responsibility | Best For |
|---|---|---|---|
| EXW (ExWorks) | Makes goods available at factory | All transport, export, freight, import, delivery | Buyers with own forwarder |
| FOB (Free On Board) | Export customs, deliver to port, load on ship | Ocean freight, insurance, destination clearance | Most common for full containers |
| CIF (Cost,Insurance, Freight) | Freight + insurance to destination port | Customs clearance & inland delivery | First-time buyers to port |
| DAP (Delivered at Place) | Delivery to buyer’s location | Import duties & clearance | Buyers with local broker |
| DDP (Delivered Duty Paid) | Everything until buyer’s door, including duties | Nothing until delivery | Buyers who want door-todoor, most common for less container load |
Why Understanding Trade Terms Matters
Not knowing these terms can lead to unexpected costs, shipment delays, or even disputes. For example,
a buyer expecting CIF (to port) but assuming it means DDP (to door) might be surprised by extra customs
fees. Knowing your Incoterms means knowing exactly where your cost ends and where your
responsibility begins.
FCL vs LCL: Whole Containers vs Shared Containers
- FCL (Full Container Load): You book the entire container (20ft or 40ft).
- Most common under FOB or CIF, because responsibilities are easier to define and costs are more predictable.
- Best for buyers who order in volume.
- LCL (Less than Container Load): Your goods share space with other shipments.
- Often used with CIF or DDP, making it easier for buyers since shipping and in many cases clearance are already arranged.
- Good for smaller orders, but costs per unit can be higher, and risks of delay increase.
for Loose Cargo
For small orders or bulk goods, some freight forwarders offer double clearance, door-to-door.
- This means the forwarder handles both export clearance in China and import clearance at the destination, plus delivery to the buyer’s door.
- In Incoterms, this service is closest to DDP, but it is often arranged by logistics agents rather than manufacturers.
- Best suited for samples, trial orders, or bulk loose cargo where the buyer wants a simple all-in-one price.
Final Thoughts
Understanding EXW, FOB, CIF, DAP, and DDP isn’t just for freight forwarders — it’s critical for buyers. Choosing the right term avoids hidden costs, clarifies responsibility, and ensures smooth delivery.
At CG OUTDOOR, we work with clients worldwide under all these terms. We have a mature logistics network, with strong partners on every route to ensure goods arrive safely in the hands of our clients or are smoothly transferred to their appointed agents. Whether you’re booking a full container, sharing space with others, or needing a double-clearance door-to-door solution, we can guide you to the most suitable option.
Have a project in mind but not sure which term to use? Reach out to our team, and we’ll help you choose the safest, most cost-effective path.
