Incoterms decide who arranges what, who pays for which leg, and where risk transfers from seller to buyer. Three terms cover most China imports: FOB, CIF and DDP. Choosing between them is not about which is “cheapest” — it’s about who you want controlling the freight.

FOB — Free On Board (named port)

Example: FOB Shanghai.

The supplier delivers the goods onto the vessel at the named Chinese port and clears export customs. From that moment, cost and risk are yours — and critically, your freight forwarder controls the ocean leg.

• Pros: You control carrier choice, freight costs and timing. Freight invoices are transparent. Easier to consolidate goods from multiple suppliers into one shipment.
• Cons: You need a forwarder and you handle destination-side customs and delivery.

CIF — Cost, Insurance & Freight (named destination port)

Example: CIF Jebel Ali.

The supplier pays ocean freight and minimal insurance to your destination port. Sounds convenient — but the supplier controls the forwarder, and the freight is marked up inside the price. Risk transfers to you when goods are loaded in China, the same as FOB. You still handle destination customs and duties.

• Pros: Simple for beginners; one price covers transport to your port.
• Cons: You pay for the convenience — often 10–20% over market freight. You can’t consolidate shipments easily, and the supplier’s forwarder answers to the supplier, not you.

DDP — Delivered Duty Paid (named destination)

Example: DDP Dubai warehouse.

The supplier handles everything: export, freight, destination customs, duties, and delivery to your door. Maximum convenience, minimum control — and you are trusting the seller’s logistics chain with your cargo all the way to your warehouse. DDP also has compliance wrinkles: duty and tax arrangements vary by destination, and some DDP arrangements cut corners that become your problem.

• Pros: One price, one responsible party, zero logistics work for you.
• Cons: Highest total cost, least visibility, and your goods depend entirely on the seller’s freight partners. Fine for samples and small parcels; think carefully for full containers.

So which should you use?

For most serious importers buying full containers or LCL from China: FOB, with your own forwarder. It gives you the best combination of cost transparency, control and consolidation ability. Use CIF for small, simple shipments when you don’t yet have a forwarder. Use DDP when a shipment is small, low-value, or genuinely not worth managing — and only with a supplier you trust.

The Incoterm doesn’t change the goods or the supplier. It changes who holds control while your money is on the ocean.

Need help coordinating the China side of an FOB shipment? See Logistics Coordination or submit a request.