EXW vs FOB vs CIF vs DDU: Complete Guide for Importers 

International shipping terms like EXW, FOB, CIF, and DDU are essential in global trade. These rules—known as Incoterms (International Commercial Terms)—define who pays for shipping, who handles customs, and when risk transfers between buyer and seller.

Choosing the wrong term can lead to unexpected costs, delays, and disputes, especially when importing from China.

In this guide by BRF SHIPPING, we explain each term in simple language and help you choose the right one.

What Are Incoterms and Why They Matter

Incoterms are standardized trade rules published by the International Chamber of Commerce (ICC). They clarify:

• Who pays for transportation

• Who handles export/import customs

• When risk transfers

• Who buys insurance

Even a small difference (e.g., EXW vs CIF) can result in thousands of dollars difference in total cost.

1. What Is EXW (Ex Works)?

EXW = Seller has minimum responsibility

Under EXW, the seller only prepares the goods at their factory or warehouse.

Responsibilities

• Seller: Pack goods and make them available

• Buyer: EVERYTHING else

Buyer Handles

• Pickup from factory

• Export customs clearance

• Freight booking

• Insurance

• Import clearance & delivery

Risk Transfer

???? At the seller’s premises

Best For

• Experienced importers

• Buyers with freight forwarders in China

⚠️ Key Insight: EXW looks cheap but often becomes the most complex and risky option.

2. What Is FOB (Free On Board)?

FOB = Most commonly used shipping term

Under FOB, the seller delivers goods to the port and loads them onto the vessel.

Responsibilities

• Seller: Inland transport + export customs + loading

• Buyer: Ocean freight + insurance + import

Risk Transfer

 When goods are loaded onto the ship

Best For

• Importers who want cost control

• Buyers with shipping agents

 FOB offers a balanced solution between cost and control.

3. What Is CIF (Cost, Insurance, and Freight)?

CIF = Seller pays shipping + insurance

The seller covers the cost of freight and insurance to the destination port.

Responsibilities

• Seller: Export + freight + insurance

• Buyer: Import customs + delivery

Risk Transfer

 Still transfers at origin port (when loaded on vessel)

Best For

• Beginners

• Buyers without freight experience

Important: Even though seller pays shipping, risk still transfers early, which many buyers misunderstand.

4. What Is DDU (Delivered Duty Unpaid)?

DDU = Door delivery, but taxes unpaid

Under DDU (now largely replaced by DAP), the seller delivers goods to the buyer’s location, but does NOT pay import duties or taxes.

Responsibilities

• Seller: Transport to destination

• Buyer: Import clearance + duties + taxes

Risk Transfer

 At delivery location

Best For

• Buyers who want door delivery

• But can handle customs locally

 DDU is a middle ground between CIF and DDP.

EXW vs FOB vs CIF vs DDU: Key Differences

How to Choose the Right Incoterm

If You Are the Buyer

• Want full control & lowest cost → EXW

• Have a forwarder → FOB (Recommended)

• New to importing → CIF

• Want door delivery → DDU / DDP

If You Are the Seller

• Minimize responsibility → EXW

• Standard export → FOB

• Earn freight margin → CIF

• Offer premium service → DDU/DDP

Real Example (China to USA)

• EXW Shenzhen → Buyer arranges everything

• FOB Shanghai → Supplier delivers to port

• CIF Los Angeles → Supplier pays freight

• DDU New York Warehouse → Delivered, but buyer pays tax

Common Mistakes to Avoid

❌ Choosing EXW without a China agent
❌ Thinking CIF includes destination fees
❌ Not clarifying customs responsibility
❌ Ignoring risk transfer point

Conclusion: Which Is Best?

There is no “best” Incoterm—only the one that fits your business:

• Best for control: FOB

• Best for simplicity: CIF / DDU

• Best for beginners: DDP (or DDU)

• Best for experts: EXW

 For most importers, FOB remains the safest and most cost-effective choice.

FAQ (SEO Optimized)

1. What is the main difference between EXW and FOB?

EXW requires the buyer to handle everything, while FOB requires the seller to deliver goods to the port and load them onto the ship.

2. Is CIF better than FOB?

CIF is simpler but gives less control. FOB is better for cost optimization.

3. Is DDU the same as DDP?

No. DDU excludes duties and taxes, while DDP includes all costs.

4. Which Incoterm is cheapest?

EXW has the lowest upfront price but may have the highest total cost.

Need help choosing EXW, FOB, CIF, or DDU?

BRF SHIPPING provides door-to-door, FOB, and DDP solutions from China worldwide.

 Contact us today for a free shipping quote and cost breakdown.

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