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CNF, CIF, FOB, DDP & EXW Explained!

August 29, 2019 by Andrew Minalto - 362 Comments
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Welcome back!

If you’re an eBay or Amazon seller who has just recently started importing from China, you know there are LOTS of things to learn! You need to know everything from how to filter out scams on sites like Alibaba to the best ways to order product samples, as well as all kinds of specific, previously unknown business terms and abbreviations.

And it’s not like you can just ignore these new terms and abbreviations. Having your price or shipping terms wrong can turn your first order into a massive disaster! You can easily incur unexpected charges that you never accounted for, which can totally ruin your projected margins and chances of being profitable on eBay or Amazon.

CNF, CIF, DDP, FOB, Ex-Works—what do they all mean? And, most importantly, which of these shipping methods is the most cost-effective? Which one is the best for your situation?

These are all great questions. In this post, I will try to explain the importing process from China as simply as possible and to best of my knowledge. Before we get into the specifics of what each of these terms mean, you have to understand that there is no ONE best pricing or shipping option to use. It all depends on what you’re ordering, how big your order is, what shipping method you plan to use, etc. So, it’s not all white and black.

With that being said, some shipping terms are better than others and, in most cases, eBay and Amazon sellers will greatly benefit from selecting the most appropriate shipping terms for their situation.

Ok, without further ado, let’s cover five of the most popular shipping and pricing terms used when dealing with suppliers from China!

FOB – Free on Board
(or Freight on Board)

The most popular term used on sites like Alibaba.com is FOB. This is basically the DEFAULT pricing used when dealing with suppliers in China.

FOB pricing means that it covers:

  • Product cost
  • Local exporting fees/customs
  • Delivery of your order to the nearest port

This price won’t cover shipping from China to the UK (or any other country), insurance of the shipment, local customs fees (VAT & import duty), customs clearance fees, local port fees or delivery to your address.

Often, you will see that the term FOB is followed by another word. For example, FOB Ningbo. Ningbo is a city in China, so FOB Ningbo means that this is the port that the supplier will ship your order to, which is covered by the FOB price.

There are many ports in China, so depending on the supplier’s location, they usually use the closest port by default. However, you can ask them to send your goods to a different port—in which case, the FOB price will most likely increase.

The reason why FOB pricing is the most commonly used in China is because, traditionally, most goods are shipped by boat. Nowadays, however, with the rise of marketplaces like eBay and Amazon—and with everyday people importing smaller orders and using couriers and air freight more often—that situation has changed.

Should you use FOB pricing with your supplier? It really depends on your order size and weight. If you will use sea freight, then yes, FOB is the way to go. If you will use air freight then, again, FOB is the way to go (only this time it will be to an airport instead). If, however, your order is small and you will use a courier delivery service, you should not use FOB. In this case, use EXW instead.

EXW (Ex-Works)

Sometimes referred to as the “ex-factory” price, EXW basically means the cost of the product and nothing else! No shipping costs or export fees in China are included in this price, never mind the local port and customs fees or delivery to your door.

Still, there’s a place for these pricing terms when you use a courier shipping method for your order. By courier shipping, I mean the fast air courier shipping method offered by companies like DHL, UPS, TNT and others. Delivery from China via courier usually just takes 4-6 business days. The downside is that courier shipments are very expensive and are only suitable for very small items (and sample orders).

If you have decided that courier shipping is the way to go, you should ask your supplier for the EXW price AND ask them to get a courier shipping quote for you.

Yes, that’s right, ask the supplier to organise your courier shipping. If you do it from the UK (or US), you will pay much more. Local Chinese suppliers will get much better rates, so there’s no point in doing this on your own.

Hopefully, your supplier will be honest, though, as sometimes they try to overcharge you on the shipping fees. The best way to avoid this is to get shipping quotes from three different suppliers, even if you don’t plan on ordering from the other two. This way, you can compare all three and see if your real supplier is trying to overcharge you. If they are, you can simply ask for an explanation as you have proof on hand that two other suppliers can ship the order for less.

Another advantage of using EXW + courier shipping is that you won’t have to deal with the local customs clearance procedure. Courier companies will do that for you and invoice you for VAT, import duty and a small customs clearance fee. Then, they’ll deliver the goods straight to your door.

So, EXW should only be used together with a courier shipping method. Don’t use it for sea freight shipments, even if you’re planning to use your own shipping agent. Instead, go for FOB because it will be cheaper than paying extra fees to your shipping agent to cover local delivery/export fees in China.

CIF & CNF

CIF — Cost, Insurance and Freight.

For CIF, the price also includes sea freight charges and insurance to deliver the goods to YOUR nearest port. But remember, it’s only to the port. From that point onwards, it’s up to you to take responsibility for the shipment.

CNF — Cost and Freight (or Cost, No Insurance, Freight)

CNF is similar to CIF, except insurance is not included.

If your supplier quoted you a CNF Felixstowe price, it means that the price includes shipping of the goods via sea freight to the Felixstowe port. When the goods arrive there, you’ll have to organise customs clearance and delivery to your home/office/warehouse.

While the CNF price can look very attractive, keep in mind that there will be other costs involved when your goods arrive in London, such as:

  • Customs clearance fee
  • Value added tax (VAT)
  • Import duty
  • Port security charge
  • Fuel surcharge
  • Docking charge
  • Warehouse storage fee
  • Etc.

So, the CNF price is really just the tip of the iceberg and is not the true, FINAL price that you’ll pay for the products you’re importing.

Also, since you’re new to importing, it will take more time than usual and be a lot of hassle for you to organise everything at the London port.

A much better alternative is to use a freight forwarding agent for your shipments from China. These companies take care of EVERYTHING mentioned above and will deliver the goods to your door without you having to mess around with the customs clearance procedure.

You will usually receive an invoice from them once your goods have arrived that clearly lists all the taxes, customs fees and port fees.

I highly recommend you use such a company, at least for your first few importing deals. These freight forwarding companies are very affordable and can actually work out cheaper than if you try to do it all on your own.

My recommendation for UK customers is Woodland Group, which is a freight forwarder with great customer service, weekly shipments from China and very competitive prices. Get in touch with them to find out exactly how much your order will cost delivered to your door after all the fees and taxes have been paid.

When contacting a freight forwarding company, make sure you ask for a door-to-door price. This is very important. Otherwise, you can end up with a host of additional charges when your goods arrive in the UK.

The FOB price in combination with the use of a freight forwarder is the most cost-effective way to do sea freight shipments from China. And you will know EXACTLY how much it will all cost, even before you place your order with the supplier.

DDP (Delivered Duty Paid)

This means that the price includes EVERYTHING:

  • Price of goods
  • Local export costs in China
  • Shipping to the UK (or any other country)
  • Customs clearance in the UK, VAT, import duty and other charges

Sounds good, right? Yes, this sounds like the PERFECT way to do business in China. And often you will discover that this DDP price is just slightly higher than the FOB price. Perfect, right?

As adults, we all know that if it looks too good to be true, it is too good to be true.

How can the DDP price be just slightly higher than the FOB price when you know that the import duty and VAT adds at least 25% extra in fees in the UK? And then add the actual shipping cost, customs clearance, etc. It simply CAN’T be true!

That’s because it’s not true. Some Chinese suppliers are taking advantage of various loopholes in the transit system, undervaluing the goods, hiding smaller shipments in bigger pallets, etc. In short, they AVOID paying proper import taxes and VAT and basically smuggle your goods into Europe without paying all the necessary taxes.

I have written a separate post about DDP scams in China here:

Without spending too much time on it here, I strongly recommend you don’t agree on DDP terms, period. If you do, you are almost certainly taking part in a tax evasion scheme, which can hurt you very badly in the long term.

Conclusion

Ok, I really hope this clarifies the various terms you might see in relation to pricing and shipping methods when dealing with importing from China.

To sum it up: If you use sea freight as your shipping method, ALWAYS ask for an FOB price! This covers the cost of the product and local charges in China to the nearest port.

Then, you can ask your supplier for the order’s dimensions (weight and size) and contact a freight forwarder (such as Woodland Group) for a door-to-door quote. Lastly, don’t forget about insurance! It usually costs just £20-£30 and it will protect your shipment against loss and damage.

On the other hand, if your order is very small and you plan to use a courier for delivery, work with EXW prices. You can ask your supplier to organise courier delivery and add that extra cost to the invoice.

Forget about CIF, CNF and DDP altogether! They will either be more expensive in the end (CIF and CNF) OR you will be participating in tax fraud (DDP).

Just so you know, DDP terms as such are not illegal. In fact, they’re totally legal and widely used in the Western world. Even companies like Amazon use DDP for international orders. For example, when you order goods from Amazon.com, you prepay the taxes to have it shipped into the EU.

The problem is that Chinese suppliers are not using this process correctly or legally. Instead, they’re playing the system and telling you that everything is ok. Just don’t do it.

That’s it for today. If you have any further questions, make sure to leave them in the comments section below. I personally reply to all comments within 24 hours, Mon-Fri.


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362 Comments
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  1. Mohammed Abdul Aziz

    Hi Andrew,

    Many thanks for great explanation for Shipment terms…

    Best of luck.
    Aziz.

    1. Andrew Minalto

      You’re welcome Aziz! 🙂

  2. Hello Andrew,,,
    I am just a beginner in import business, i wanted to import mobile ph accessories like mobile cover,data cables etc from china to India,, i am negotiating with chines supplier through alibaba portal they are giving me f.o.b. price by air courier like DHL,FedEx,is this including the coustom duty,VAT,insurance, import duty etc, and this will include door to door service ,,or i have to pay all this when it reach to New Delhi, kindly explain it,and if i am importing any item so i need import
    & export license?
    Regards
    Rahman

    1. Andrew Minalto

      Hi Rahman,

      Shipping costs will almost NEVER include VAT, import duty and other local taxes you may need to pay at destination.

      So no – it is just to cover shipping costs.

      Thanks,
      Andrew

      1. Rahman

        Thanks Andrew,,,, but should i need import export license for that?

      2. Andrew Minalto

        No, you don’t.

  3. Don’t FOB and CIF sound same? What’s the difference?

    1. Andrew Minalto

      No, it’s not.

      FOB just means products are being delivered to nearest port in China while CIF will include Shipping to your port + insurance.

      Thanks,
      Andrew

  4. Hi Andrew,
    For door to door service, is actually from wh shipper to wh receiver? or it could be from port to door if im using FoB?
    thanks a tons!

    1. Andrew Minalto

      It can be from Prot to Door if you’re using FOB, yes.

      That’s actually what we usually do.

      Andrew

  5. Terri Smith

    Thank you for the very informative explanation! In June, I had a shipment sent by air from China to Texas to the Amazon warehouse. I asked for door to door service and paid the air freight charges. My contract says FOB. I just received, three months later, a charge for Duty for $311 that my supplier said FEDEX charged them and we now owe them.

    I thought if it was door to door, that all charges were included in the cost of the shipping that we sent with the payment on the order.

    Your answer from March 21, 2017 at 6:23 am about this seems to confirm this:
    “If goods are sent via courier, you don’t have to worry about FOB, CIF etc. etc. It simply does not apply to courier shipments.”

    Could you elaborate on this? By courier, did you mean freight forwarder, or is a courier FEDEX?

    Thank you,
    Terri Smith

    1. Andrew Minalto

      Hi Terri,

      Import duties, taxes, VAT are almost NEVER included in ANY shipping forms/quotes.

      So if supplier used their own Fedex account, fully serviced account (this means that all taxes are also accounted for them), then yes – you could owe you them that money now.

      Usually though you would have to pay these taxes, at your end, when you receive goods. So ask supplier for some kind of proof that they have indeed been billed for your taxes.

      Andrew

  6. Hi Andrew

    I thought I had outgrown my current source, but now with all these extra cost’s in mind, I may decide to stick with what I know best.

    I love love love your articles, they have helped so much. Thank you x

    1. Andrew Minalto

      You’re welcome Marie! 🙂

  7. It’s really helpful to unknown person like me.

    Thanks.

    1. Andrew Minalto

      You’re welcome Hasan! 🙂

  8. Danushadha

    Thanks Andrew this is so much worth and also sharing the knowledge is the one of the most greatest thing that some can do , and you did it !!!

    1. Andrew Minalto

      You’re welcome! 🙂

  9. thank you Andrew!

    1. Andrew Minalto

      You’re welcome Kristine! 🙂

  10. Kristine KRDCO

    Hi Andrew,

    Thanks for this straight to the point post! It is really helpful specially for newbies like me.

    I will be importing from Alibaba , china with FOB price . The supplier already sent me quote for door to door delivery, but i want to know if it is better to hire freight forwarder.

    Can you suggest good and affordable freight forwarder for Australia door to door delivery?

    Thank you so much!

    1. Andrew Minalto

      Hi Kristine,

      Yes, you should use your own, trust and reliable FF, like this one:

      https://www.woodlandgroup.com

      Thanks,
      Andrew

  11. Hi Andrew,

    Iam new to this kind of business and Iam really frustrated!
    Iam not an USA citizen but I want to start importing goods from China and sell them in amazon FBA USA.
    Will I pay taxes too ? Or any other fees rather than the shipping and Amazon fees?

    Thank you

    1. Andrew Minalto

      Hi Dina,

      Yes, you’ll need to pay import duty upon importing goods and then Sales tax in the USA.

      This is a complex topic – I recommend you search on Google about this and learn all the aspects of doing business in the USA using FBA.

      Andrew

  12. Martin O'Hagan

    Hi Andrew,
    I am talking to Chinese supplier about purchasing a couple of engineering machines. He quoted me CIF. So that means cost of the product+insurance+ freight all inclusive – right?
    If I want to use a freight forwarder as you are suggesting. That means I need to ask the supplier for EXW – right?
    Thanks in advance
    Martin

    1. Andrew Minalto

      Hi Martin,

      That’s right, yes. But don’t forget that CIF price won’t include any local/port feee, customs clearance, local delivery etc. which can be a huge sum. So I always recommend using a freight forwarder – get a door to door quote. It can be EXW price for a try door to door but more often I go with FOB – this means that supplier sends goods to the nearest port, where freight forwarder takes over.

      FOB means that charges to port will be included while EXW – not.

      Andrew

  13. Hey Andrew,

    I a new FBA seller and have found my product and I am banging my head against my desk trying to figure out this shipping process. I am looking to ship 500 units to my house using dhl or ups Express delivery. I was given a quote of “EXW hangzhou +.50 / unit for fedex shipping”. If I am using Fedex to ship my products, why would EXW be needed? They are light units under 1lb. I am just trying to get from point A which is China to point B the east coast in the United States. Since this is my first time, I would like to know the easiest way possible and it seems to me I cannot find that answer,

    Thank you for your time.

    1. Andrew Minalto

      Hi Madison,

      EXW price means – just product price, without any local Chinese exporting/customs fees, no shipping to you.

      You want to ask supplier to get a courier shipping quote for you so that you know exactly how much it will cost.

      BUT to be honest – a 500 lb shipment will be very expensive via courier methods… if it makes financial sense to you, you can do it of course but usually with order that heavy/big you would want to use a sea freight service.

      Thanks,
      Andrew

  14. Hey Andrew –

    Am trying to ship my stage piano keybaord from China to the US and am totally banging my head against the wall trying to figure out how to get it done.

    One key question is this – I’m currently in Shanghai but will be moving back to Los Angeles – both are port cities. if I was able to do FOB to the port of Los Angeles, would I be able to go personally pick it up from the port? I assume I would still need to pay some sort of customs fees, but since I live near the port, if I was able to drive over and pick it up directly I feel that FOB would be sufficient (as opposed to FF).

    Thanks for your help!

    1. Andrew Minalto

      Hi Jeff,

      Yes, you should be able to pick up the shipment on your own from the warehouse in LA but yes, you’ll still need someone to do customs clearance for you + you’ll have to pay various port fees too.

      Andrew

      1. Do you have any recommendations for customs clearance services? Do you have any idea what to expect the customs cost for these goods (approx $2000 value) to be?

      2. Andrew Minalto

        No, sorry, don’t have anyone to recommend for this.

  15. Hi Andrew..I am currently importing 300 items from China and my supplier from Alibaba is going to send the shipment via FedEx Express shipping to my home in Dallas,Texas,USA. In Alibaba trade assurance system, he has created the contract with trade term CIF. Is this okay? He is a gold supplier,assessed supplier and has 6 year history so I have a belief that I won’t be scammed. This is my first ever order from Alibaba. Please advise if CIF Incoterm applied to Air express shipping as well ?

    1. Andrew Minalto

      Hi Sanj,

      Not sure to be honest – usually CIF, FOB etc. are used for sea freight shipments.

      For couriers, “air” or “air express” is usually used.

      You should ask your supplier about this.

      Thanks,
      Andrew

  16. Very helpful…
    simple and clear…
    Regards,

    1. Andrew Minalto

      You’re welcome Essam! 🙂

  17. Ken Fletcher

    Andrew
    Thanks for the information supplied.

    1. Andrew Minalto

      You’re welcome Ken!

  18. thanks

  19. Hi Andrew,

    Further to my last comment, your blog does clarify that fob has the product shipped to the nearest port to the buyer and then the buyer is responsible for any charges associated with getting the products delivered to the door. But what about CIF comma what are the charges associated once the products are delivered to the nearest port to the buyer?

    Thank you,
    Kris

  20. Hi Andrew,

    Thank you for your blog Andrew, it is very informative. It is sincerely appreciated the time you take to share the knowledge you have.

    I am in Canada and am looking at importing medical instruments and the supplier or the manufacturer has quoted me prices based on CIF. Looking at the different options, insurance Freight seems very good, or am I just not seeing it right?

    If CIF means the manufacturer would be sending the products to the nearest port to me, for instance Toronto. Am I just two arrange moving the product from the port to my door? In this case do I need a freight forwarding company? Or do I just go to my nearest port and pick up the order?

    Your help and guidance in this is sincerely appreciated.

    Thank you,
    Kris

    1. Andrew Minalto

      Hi Kris,

      I’m afraid it’s not that simple.

      Technically yes, that’s how it works BUT the problem is all the fees you’ll be facing at the port – you’ll have to pay various handling, storage, un-loading, customs clearance and other fees. They can run into hundreds for even small shipments. And you never really know how much exactly you’ll have to pay in those fees.

      So, for that reason, I recommend that you work with a freight forwarder who can offer you door to door delivery, with a set, all inclusive price so you know exactly how much it will cost you to get those goods delivered to your address, including all port fees. Find a freight forwarder and work with them.

      Andrew

      1. Maria Keenan

        Is it best/cheaper to do FOB and get the freight forwarder to send it to my door or is it better to get CIF and then get the freight forwarder to deliver to my door?

      2. Andrew Minalto

        Hi Maria,

        FOB is better, yes, if you work with a good freight forwarder company, like Woodland Global.

        Some companies will always try to over-charge you on all kinds of fees, so always get a final door to door price quote that includes everything BEFORE you start the order process.

        Thanks,
        Andrew

  21. hy Andrew,

    again.
    I would like to ask your support in shipping methods to Australia.
    Which the best (cheapest) way? …and about cost; from Europe.

    thank you

    John

    1. Andrew Minalto

      Hi John,

      It depends on the order size and weight.

  22. hy Andrew,

    the information is useful, which you shared.

    thank you

    John

    1. Andrew Minalto

      You’re welcome John! 🙂

  23. Neither I or the chines companies I contacted were able to find a forwarding agent to Ghana that did door to door. The best that they could find was CIF. DO you know any forwarding companies that may do this ?

    1. Andrew Minalto

      No, sorry.

  24. Hi Andrew,
    The suppliers I have been talking to always suggest using well known couriers when exporting from China to the USA, I know this is more expensive but as they are only small quantities, is it more secure using FedEx/UPS etc so that I don’t have to worry about FOB or EXW for the mean time? Thanks, Aaron

    1. Andrew Minalto

      Hi Aaron,

      Thanks for your comment.

      Yes, for small quantities/orders, there are no real alternatives to using a courier. Sea freight and Air freight are only cost effective with bigger orders so just stick with couriers for now and keep it simple.

      Thanks,
      Andrew

  25. Hi Andrew,

    I am in contact with supplier from china and want to buy some kids clothing into UK. it won’t be much, around 200-300 items and cost is around 1200$ EXW terms.
    If I ask them to ship it through courier, what other charges should I expect on top of items price?
    customs?
    shipping?
    would you be able to tell roughly cost of it or who should I ask.
    its the first time I’m trying to buy from china and my head is melting by now 🙁
    Thank you for you help

    1. Andrew Minalto

      Hi Darius,

      If you’re planning to do an importing deal, you should learn a bit more about how it works.

      I have plenty of articles/posts about this process on my blog, so just start reading 🙂

      here’s the list of all posts:

      http://andrewminalto.com/start-ebay-business/

      Thanks,
      Andrew

  26. Janis Bull

    Hi Andrew

    I am importing a small first time order from China to the value of £750.00. The supplier is sending the goods via FEDEX door to door (this is included in the shipping charges). But there are no trade terms stated on the invoice i. e FOB CIF or CNF, other than our address in the UK. There was originally CNF on the invoice but this was removed and our UK address was added to the additional notes sction and not under trade terms, s this a problem, or should there a trade/Incoterm on there?

    Also we were going to pay for the goods via Alibaba secure payment (Escrow) either by TT or by credit card. What would you advise?

    Many thanks
    Jan

    1. Andrew Minalto

      If goods are sent via courier, you don’t have to worry about FOB, CIF etc. etc. It simply does not apply to courier shipments.

      Trade Assurance – pay with a credit card.

      Thanks,
      Andrew

      1. Thankyou for that.

      2. Andrew Minalto

        You’re welcome Janis!

  27. Hi Andrew
    Im Mehul from India and am planning to import a machine from china. We are in the last phase of our deal and the supplier says that they would send the machine on FOB and after that we would have to handle the remaining process to get the machine delivered at my factory.
    Would you please let me know what should i do to complete the rest of the process to get the machine on indian port and then to my factory.
    As im first time importer from china, i would like to know the things to keep in mind while completing the deal?
    Thank You.

    1. Andrew Minalto

      Hi Mehul,

      Find a local freight forwarding company in India who can assist you with shipping, customs clearance procedure, port fees etc. etc.

      I wouldn’t recommend doing it all on your own if it’s your first importing deal. You may end up over-paying a lot in various fees.

      So yes, find a freight forwarded company and work with them on this shipment.

      Thanks,
      Andrew

  28. Andrew

    I do a lot of shipping from china to the US. However, I found UPS,DHL and fedex to be very expensive. A representative from both ups and DHL recommended using a shipper/forwarder from China. Unfortunately, I’ve been underwhelmed by their attention to details, processing time and cost. Can you recommend a good/great option whom may also be more affordable and reasonably priced in door to door shipping from china via sea or air?

    Thanks

    1. Andrew Minalto

      Hi Derrick,

      Thanks for your comment.

      Have you used Woodland Global before? They’re great to work with, very affordable (at least in the UK), so you may want to give them a try:

      http://www.woodland-group.com/division/woodland-global

      Thanks,
      Andrew

  29. Hi I have just made my first order on alibaba through secure payment. My order total was $136 and included free shipping via DHL express. Now what I am wanting to find out is if I should expect any further charges to pay once the goods are in the UK? if so based on my order total what would be the total expected cost. At present I have made payment via alipay secure payment and waiting for verification of my payment. As you can tell I am a complete newbie to this and through the best way to gain some confidence from ordering from China is to take the first plunge!

    1. Andrew Minalto

      Hi Abdul,

      Please check this post for more info on import taxes:

      http://andrewminalto.com/import-duty-vat-threshold/

      Thanks,
      Andrew

  30. ROCCO MILO

    Hi! Andrew, my name is Rocco Milo, I am in Whitby, Ontario, Canada., and I am already in contact with a company in China, as is my first time do it importing and I assuming the procedure will be the same to UK by a freight forwarding company.

    Can you please let me know your opinion if will work the same or something different.

    My regards,

    1. Andrew Minalto

      Hi Rocco,

      Yes, basically it will be same thing if using a freight forwarder company.

      Thanks,
      Andrew

  31. Noor Sarwar

    Dear Andrew,

    Would like to say THANKS
    Very impressive and easier way to learn from your goodself .

    Noor.

    1. Andrew Minalto

      You’re welcome! 🙂

  32. Do you have any recommendations for FF going from China to the US?
    Thanks,
    Jason

    1. Andrew Minalto

      Hi Jason,

      Woodland Global operates Worldwide, including the US:

      http://www.woodland-group.com/contact-us/north-america/america

      Thanks,
      Andrew

  33. Very Informative.
    Thankyou!

    1. Andrew Minalto

      You’re welcome Rameez!

  34. Apolinário

    This was the quickest and most helpful way to explain these matters! Really appreciate it.
    Thank you so much. Be blessed.

    1. Andrew Minalto

      You’re welcome!

  35. Hi Andrew,

    Thank you for being informative.
    Would a freight forwarder help consolidate items to ship through courier?
    For example if there’s 200 items total and each at least weighs 1lb or less.

    1. Andrew Minalto

      Hi Jess,

      You mean 200 items from different suppliers?

      They can probably do this but it will be expensive.

      And a 200lb shipment via courier will be very expensive by default. So you should rather consider sea freight or at least air freight options.

      Thanks,
      Andrew

  36. Great advice. .

  37. Russell Choudhury

    Hi great article very useful.

    I just am confused between difference between FOB and door to door.

    In door to door does the Freight forwarder pick the shipment up from the factory?

    In FOB does the supplier ship to the port then the FF takes over at the port. Or does the supplier put it onto the ship?

    Also why do you recommend getting fob price and then using door to door?

    1. Andrew Minalto

      Hi Russel,

      Thanks for your comment.

      The classic Door to Door would be when freight forwarder picks up shipment from the factory and then delivers to your door. You would ask for EXW price from supplier in this case.

      The problem is that FF charges will be quite high for picking up goods from supplier hence I recommend that you get FOB price from supplier – this means that shippment goes to port where FF takes over. So you need to know from which ports FF operates and then give that info to supplier to get FOB price for that port.

      This way supplier covers charges for goods to be delivered to port and they will be cheaper than FF’s charges.

      Hope this clears it up!

      Thanks,
      Andrew

  38. Julian Dixon

    Thanks for your article… are there any freight forwarders/agents you might recommend to get goods to Sweden from China? Thx Jules

    1. Andrew Minalto

      Hi Jules,

      I can recommend same Woodland Global:

      http://www.woodland-group.com/contact-us/europe/sweden

      Thanks,
      Andrew

  39. Stanley Lim

    Dear Andrew,

    I find your article very helpful. I am planning to order from various suppliers over Alibaba.com and have a couple of questions I would like to seek your advice.

    1) Would it be more costly if I were to get all my suppliers to individually arrange door to door shipping of the goods to my address?

    2) If I decide to use a Forwarding agent for door to door shipping, would it be wiser to ask my product suppliers for ex-warehouse quotes instead of FOB? Since all the shipping cost would be handled by the forwarding agent?

    Thanks

    1. Andrew Minalto

      Hi Stanley,

      1) Yes, it would be MUCH more expensive.

      2) You would still want FOB prices arranged to same port for all suppliers. Port where your freight forwarder can consolidate this shipment.

      Andrew

  40. Hi Andrew

    I am looking at starting a new business and importing Baby clothes from China to Zurich (Switzerland).
    I have been quoted a price of $5800 FOB, my question is which company should I use to ship the items to Zurich (Switzerland) and what other costs would be involved in getting the Baby clothes to Zurich (Switzerland).

    If you know any companies I should get quotes form, their names would be appreciated.

    Thanks

    1. Andrew Minalto

      Hi Angela,

      Contact WG, they can take care of all this for you:

      http://www.woodland-group.com/contact-us/europe/switzerland

      Thanks,
      Andrew

  41. Hi Andrew

    I am looking at starting a new business and importing sweets from Dubai to Nottingham UK.
    I have been quoted a price of $4600 FOB, my question is which company should I use to ship the items to UK and what other costs would be involved in getting the pallet to Nottingham.

    If you know any companies I should get quotes form, their names would be appreciated.

    1. Andrew Minalto

      Hi Yogesh,

      Yes, get in touch with this company to organise shipping, customs clearance etc.:

      http://www.woodland-group.com

      Thanks,
      Andrew

  42. Andrew, thank you very much for your expertise and help.
    Q: If I am shipping a container with auto parts from, lets say, from Los Angeles to X port in the Middle East and the shipping company quote me a price CIF that means that my buyer will have to take care of the container from then on including customs clearance ?
    Once again thank you VERY much.

    1. Andrew Minalto

      Yes, that’s correct Rey.

  43. Hi there mate, I want to order bicycles from china, and they offer FOB it means I will need to pay VAT and import, anti dumping duty, customs clearance and etc? what is cleared by FOB

    1. Andrew Minalto

      Yes, correct.

      FOB price only covers cost of goods and delivering them to the port.

      1. Sergej

        so basicly its the same as CNF?

      2. Andrew Minalto

        No.

        CNF includes shipping charges.

        FOB does not include shipping charges.

      3. Sergej

        It means CNF is better then FOB?

      4. Andrew Minalto

        Not better, not worse – they’re 2 different things.

  44. Awesome advice. Thanks AM

    1. Andrew Minalto

      You’re welcome Sean!

  45. Hello Andrew,

    You seem to offer extremely helpful advice so I wonder if you could offer me some advice with an import problem that I believe relates to this thread.

    I have imported a plastic bathroom product for a number of years. I pay the company in China for the goods and shipping by bank transfer and they then send the goods to my door via airfreight using a well known courier. The courier then send me a vat and duty invoice which I pay.

    The duty has always been (roughly) 6.5% of the costs of the goods and the VAT 20% of the cost of the goods. So for example if the goods were £1000GBP then I would expect duty of £65 and vat of £200.

    On a recent order though the delivery arrived, the cost of the goods was £3500GBP so I was expecting to pay roughly £228 duty and £700 Vat £928 total. When the invoice arrived though it was for £606.85 duty and £2254.15 Vat a total of £2861.00

    I queried the invoice with the courier and initially the told me they had made an error with the paperwork and refunded me £331.76 duty but told me I needed to reclaim the VAT myself. They have since emailed me and told me that all my previous invoices were only charged VAT and Duty on the goods as the seller had not declared the cost of delivery. It said the Commercial invoice from China confirms the value of the goods however the Customs declaration document does not show the AWB/ Frt Charges. This information was not provided on the official document therefore this has not been taken into consideration when calculating the duty vat element due. As a consequence you have been underpaying duty and vat on previous orders???

    I have since had further orders and im only be charged VAT and Duty on the cost of the goods still. So im confused, was that one invoice correct and all the others wrong or has someone at the courier or sender changed something for that one delivery which has made the invoice so high. I hope you can point me in the right direction as I have not paid the courier the extra money as I believed it was wrong but they are now threatening me with court action. One extra thing I noticed was the very high invoice has FOB Shanghai on the commercial invoice but this does not appear on any previous commercial invoices. The same box has ‘Terms S’ in it.

    I look forward to your reply.

    Kind Regards

    Paul

    1. Andrew Minalto

      Hi Paul,

      I don’t know really what to suggest as it is a very specific case…

      You do have to pay VAT on shipping though so if you haven’t done it previously, it could be that you under-paid all the time. I don’t know though legally how they can now charge you for all previous orders.

      I can’t really help much with this, you’ll have to sort this out with courier company and Customs.

      Andrew

  46. Hi Andrew your website is really useful, thank you!
    I have a client that want to buy some non-latex sponges to Argentina, as per your article the best would be to find me a freight forwarding agent, I would like to ask you if should I consider any other permit/license or anything in order to export this good since it touches the skin? (I’m in China for many years but I’m new in this field)
    I would really appreciate your opinion, thank you very much in advance!

    Kind regards,
    Laura

    1. Andrew Minalto

      Hi Laura,

      I’m sorry but I don’t have specific knowledge on these products and exporting them to Argentina.

      You’ll have to do your own research on this, especially if this is your business.

      Thanks,
      Andrew

  47. Austin Addo

    Hello Andrew,

    Is the fob dependent on the importing country? When I am in Israel and I am importing an item from China, will the fob differ from another importer importing from Sierra Leone?

    My opinion is that fob depends on the exporter but please enlighten me further.

    Thanks

    1. Andrew Minalto

      Hi Austin,

      No, FOB does not change because of destination country as shipping costs are not included in FOB price.

      Andrew

  48. Hi. Hopefully you can help me too.
    I had ordered a shipment from China to Southampton CIF.
    Appointed freight forwarder as quote was good. I understand I need to pay tax and vat, customs clearance and my agents delivery charges. Now I found out I will need to pay an additional £127 for arriving fees. When I questioned that I was advised that shipment is going into London Gateway instead. According to another company I shouldn’t be charged that much. My question is what additional charges are there with CIF? I feel that my freight forwarding company whants to make money on me 🙁

    1. Andrew Minalto

      Hi Agnes,

      Those fees vary greatly depending on port shipment size and shipping company.

      I can’t give you any exact numbers I’m afraid.

      Andrew

  49. Hey Andrew

    I am getting ready to import fencing materials to US , Who would be a good freight forwarder to use to import here?

    Thank You in Advance.

    1. Andrew Minalto

      Hi Tony,

      Same Woodland Global I recommend also works in the US:

      http://www.woodland-group.com/division/woodland-global

      Thanks,
      Andrew

  50. wish I had read this before. I have imported from china by air freight – no problems. However 1 order has gone cif and arrives next week in Folkestone. Just received an unexpected £700 list of fees. Plus goods will start to incur warehouse fees. Can I just abandon the goods with no further liability as its not worth the cost to get them ? or am I now liable and stuck paying far more than the goods are worth ?.

    1. Andrew Minalto

      Hi Darren,

      Yes, this is very typical…

      But I don’t know what happens if you simply abandon goods and don’t proceed with payments etc. Theoretically, if you haven’t signed any contracts with freight forwarder, you shouldn’t be in trouble but I’m not sure as I have never done it.

      You may try asking freight forwarder about this – be honest, tell them that you did not expect such extra costs and that it’s not cost effective for you to proceed with it. See what they say.

      Andrew

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