A clear, practical guide to all Incoterms used when importing from China. Understand exactly who is responsible for what at every stage of shipment.
Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC). They define who — buyer or seller — is responsible for each element of international shipping: freight, insurance, customs, and risk of loss.
Using the wrong Incoterm when importing from China can result in unexpected costs, uncovered risk, or customs complications. Understanding them is fundamental to international trade.
Responsibility transfers: At the factory gate in China
The seller (factory) makes goods available at their premises. The buyer is responsible for everything: domestic pickup in China, export customs, freight, insurance, import customs, import duties, and delivery to destination.
When to use: Only when you have your own freight forwarder and customs agent in China. NOT recommended for new importers.
Responsibility transfers: When goods are loaded onto the ship at the Chinese port
The seller handles: export packaging, export customs clearance, domestic transport to Chinese port, loading onto ship.
The buyer handles: international freight, insurance, import customs clearance, import duties, inland delivery.
When to use: When you have a good freight forwarder and know how to arrange your own shipping. FOB is the most common Incoterm for China exports and is typically the basis for supplier price quotations.
Responsibility transfers: When goods are loaded at Chinese port (same as FOB for risk, but seller pays freight)
Seller pays: all costs to get goods to destination port (including freight). Buyer is responsible for: insurance, import customs, import duties, inland delivery.
Risk passes when goods are loaded in China, so goods are at buyer's risk during transit even though seller paid for freight.
Responsibility transfers: At destination port
Seller pays: freight to destination port PLUS minimum insurance. Buyer handles: import customs, import duties, and inland delivery from destination port.
Note: The minimum insurance in CIF is just 110% of cargo value — many buyers add their own comprehensive insurance.
When to use: When you want the seller to arrange freight and insurance, but you can handle import customs yourself.
Responsibility transfers: At the buyer's named destination
Seller handles everything up to delivery at buyer's address — but the buyer is still responsible for import customs clearance and import duties.
Useful compromise: seller delivers to destination but buyer handles customs.
Responsibility transfers: At buyer's door (maximum seller responsibility)
Seller handles: everything from factory to buyer's address, including export clearance, freight, insurance, import customs, import duties and taxes, and last-mile delivery.
When to use: When you want the simplest possible import experience. Ideal for new importers, complex destination countries, or when managing logistics is not your core competency.
Read the full DDP Shipping Guide →
| Incoterm | Risk Passes At | Who Pays Freight | Who Clears Import Customs | Who Pays Duties |
|---|---|---|---|---|
| EXW | Factory gate | Buyer | Buyer | Buyer |
| FOB | Ship's rail (origin) | Buyer | Buyer | Buyer |
| CFR | Ship's rail (origin) | Seller | Buyer | Buyer |
| CIF | Ship's rail (origin) | Seller | Buyer | Buyer |
| DAP | Named destination | Seller | Buyer | Buyer |
| DDP | Buyer's address | Seller | Seller | Seller |
Choose DDP. Zero logistics complexity. Receive goods at your door without dealing with freight forwarders, customs agents, or duty payments.
Choose FOB. Factory loads goods onto ship. You arrange freight and customs. FOB gives you most control over logistics costs.
CIF or DDP. UAE has only 5% duty so DDP is very affordable. Most UAE importers use DDP or CIF for simplicity.
DDP or FOB. India's complex multi-layer duty structure (BCD + SWS + IGST) makes DDP very attractive. FOB if you have an experienced Indian customs broker.
ChinaBajar DDP shipping handles everything from Chinese factory to your warehouse. No customs hassle, no surprise costs.
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