{"id":1237,"date":"2026-07-16T13:05:00","date_gmt":"2026-07-16T13:05:00","guid":{"rendered":"https:\/\/bravofabs.com\/?p=1237"},"modified":"2026-07-16T22:07:52","modified_gmt":"2026-07-16T14:07:52","slug":"international-trade-terms","status":"publish","type":"post","link":"https:\/\/bravofabs.com\/international-trade-terms\/","title":{"rendered":"Some Common International Trade Terms"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">When you import CNC machined parts, sheet metal components, or welded assemblies from China, your supplier&#8217;s quote will include a three-letter code \u2014 <strong>EXW, FOB, CIF, DAP, or DDP<\/strong>. These aren&#8217;t just shipping labels. They legally define who pays for freight, who handles customs, who buys insurance, and \u2014 critically \u2014 <strong>at what exact moment the risk of loss or damage transfers from the seller to you<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Choosing the wrong Incoterm can quietly add 15-30% to your landed cost in the form of unexpected destination charges, customs brokerage fees, or port handling costs that weren&#8217;t in the original quote. This guide explains the six Incoterms you&#8217;ll actually encounter when importing from China, with practical examples for manufacturing buyers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Are Incoterms?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Incoterms (International Commercial Terms) are a set of 11 standardized three-letter trade terms published by the International Chamber of Commerce (ICC). The current version \u2014 <strong>Incoterms 2020<\/strong> \u2014 came into effect on January 1, 2020. Each term defines exactly four things in an international sales contract:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Delivery point:<\/strong> Where and when the seller&#8217;s obligation to deliver is fulfilled<\/li>\n<li><strong>Risk transfer:<\/strong> The exact moment responsibility for loss or damage shifts from seller to buyer<\/li>\n<li><strong>Cost allocation:<\/strong> Who pays for transport, insurance, customs clearance, and duties<\/li>\n<li><strong>Customs responsibility:<\/strong> Who handles export and import formalities<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Always specify the version when using an Incoterm \u2014 write &#8220;FOB Shenzhen, Incoterms 2020&#8221; not just &#8220;FOB Shenzhen.&#8221; This prevents disputes over which version&#8217;s rules apply.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Six Incoterms That Matter for China Imports<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While there are 11 Incoterms total, only six are commonly used when importing manufactured goods from China. They range from maximum buyer responsibility (EXW) to maximum seller responsibility (DDP):<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Incoterm<\/th><th>Full Name<\/th><th>Risk Transfers<\/th><th>Who Pays Freight<\/th><th>Who Handles Import Customs<\/th><th>Best For<\/th><\/tr><\/thead><tbody><tr><td><strong>EXW<\/strong><\/td><td>Ex Works<\/td><td>At seller&#8217;s factory gate<\/td><td>Buyer (all of it)<\/td><td>Buyer<\/td><td>Buyers with their own China logistics team \u2014 rare for first-time importers<\/td><\/tr><tr><td><strong>FOB<\/strong><\/td><td>Free On Board<\/td><td>When goods cross the ship&#8217;s rail at origin port<\/td><td>Buyer (ocean freight + destination)<\/td><td>Buyer<\/td><td>Most common for sea freight from China \u2014 buyer controls shipping<\/td><\/tr><tr><td><strong>CIF<\/strong><\/td><td>Cost, Insurance &amp; Freight<\/td><td>Same as FOB (at origin port)<\/td><td>Seller (to destination port, incl. insurance)<\/td><td>Buyer<\/td><td>Buyers who want the seller to arrange shipping but accept port-to-port risk<\/td><\/tr><tr><td><strong>DAP<\/strong><\/td><td>Delivered at Place<\/td><td>At named destination (before unloading)<\/td><td>Seller (to destination)<\/td><td>Buyer<\/td><td>Door-to-door without import clearance \u2014 buyer does customs<\/td><\/tr><tr><td><strong>DDP<\/strong><\/td><td>Delivered Duty Paid<\/td><td>At named destination (after unloading)<\/td><td>Seller (all costs incl. duties)<\/td><td>Seller<\/td><td>Simplest for buyer \u2014 seller handles everything. Often most expensive<\/td><\/tr><tr><td><strong>FCA<\/strong><\/td><td>Free Carrier<\/td><td>At named place (carrier&#8217;s premises)<\/td><td>Buyer (main carriage)<\/td><td>Buyer<\/td><td>Air freight or containerized goods where FOB isn&#8217;t appropriate<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">EXW (Ex Works) \u2014 Maximum Control, Maximum Headache<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Under EXW, the seller&#8217;s only obligation is to make the goods available at their factory or warehouse. From that point, the buyer is responsible for <strong>everything<\/strong>: loading the truck, export customs clearance in China, freight to the port, ocean\/air freight, import customs at destination, duties, taxes, and final delivery.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Why suppliers like it:<\/strong> It&#8217;s the cheapest quote \u2014 the supplier&#8217;s price only covers manufacturing. But that low price is deceptive. If you don&#8217;t have a freight forwarder in China who can pick up from the factory and handle export documentation, EXW will cost you more in logistics headaches than you save on the unit price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practical tip:<\/strong> If a supplier quotes you EXW, ask them to also quote FOB. The difference is typically 2-5% of the order value, and it saves you from arranging factory pickup and Chinese export clearance \u2014 two things no overseas buyer should be doing themselves.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FOB (Free On Board) \u2014 The Industry Standard for Sea Freight<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">FOB is the most common Incoterm for CNC parts shipped by sea from China. Under FOB, the seller handles everything up to and including loading the goods onto the vessel at the origin port (e.g., FOB Shenzhen, FOB Shanghai). The seller clears Chinese export customs. Once the goods are on board, risk and cost transfer to the buyer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What the buyer pays after FOB:<\/strong> ocean freight, marine insurance (optional but recommended), destination port charges, import customs clearance, import duties\/VAT, and final delivery to your warehouse.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>At BravoFabs, FOB Shenzhen is our standard shipping term.<\/strong> We handle factory-to-port logistics, export documentation, and loading. You arrange the ocean freight with your forwarder \u2014 or we can recommend one. This gives you control over shipping costs while we handle the China-side complexity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">CIF (Cost, Insurance &amp; Freight) \u2014 Seller Arranges Shipping<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">CIF is like FOB but the seller also pays for ocean freight and minimum insurance coverage to the destination port. The risk still transfers at the origin port (loading onto the vessel), which means if your shipment is damaged at sea, you claim against the insurance \u2014 not the seller.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The CIF trap:<\/strong> The &#8220;I&#8221; in CIF only covers minimum insurance (typically 110% of invoice value, Institute Cargo Clauses C \u2014 the lowest level). It does NOT cover all risks. For CNC parts worth thousands of dollars, buy additional all-risk marine insurance. And remember: CIF does NOT include destination port charges, customs clearance, duties, or final delivery \u2014 those are still your responsibility.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">DAP (Delivered at Place) \u2014 Door Delivery, You Handle Customs<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Under DAP, the seller delivers the goods to your named destination \u2014 your warehouse, office, or a specified address \u2014 ready for unloading. The seller pays all transport costs to that point. However, <strong>import customs clearance, duties, and taxes remain the buyer&#8217;s responsibility<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DAP is a good middle ground when you want the simplicity of door-to-door delivery but are comfortable handling your own import customs (or using your own customs broker). It avoids the customs liability issues that can make DDP problematic.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">DDP (Delivered Duty Paid) \u2014 The &#8220;All-In&#8221; Option<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">DDP is the simplest Incoterm for the buyer \u2014 and the most expensive. The seller handles everything from factory to your doorstep, including import customs clearance, duties, and taxes in your country. You receive the goods, unload them, and that&#8217;s it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>When DDP makes sense:<\/strong> For small prototype orders, first-time importers unfamiliar with customs, or buyers in countries with complex import regulations. The seller&#8217;s premium for handling everything is often worth the time saved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>When DDP doesn&#8217;t make sense:<\/strong> For regular production orders. The seller marks up shipping and duties by 10-20%, and once you understand your country&#8217;s import process, you can clear customs yourself and save that markup on every order.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How BravoFabs Quotes Shipping Terms<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">We quote all CNC machining, sheet metal, and welding projects on the following basis:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Option<\/th><th>Incoterm<\/th><th>What&#8217;s Included<\/th><th>What You Handle<\/th><\/tr><\/thead><tbody><tr><td><strong>Standard<\/strong><\/td><td>FOB Shenzhen<\/td><td>Manufacturing + China export clearance + loading onto vessel<\/td><td>Ocean\/air freight + destination customs + delivery<\/td><\/tr><tr><td><strong>Door-to-Door<\/strong><\/td><td>DAP (or DDP on request)<\/td><td>Everything except import customs (DAP) or everything to your door (DDP)<\/td><td>Import customs only (DAP) or nothing (DDP)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Every quote includes both the unit price and the estimated shipping cost broken down by Incoterm, so you can see exactly where your money goes \u2014 no hidden charges buried in a shipping line item.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Always specify the Incoterm version.<\/strong> Write &#8220;FOB Shenzhen, Incoterms 2020&#8221; \u2014 not just &#8220;FOB Shenzhen.&#8221; The ICC updates these rules periodically, and version ambiguity causes disputes.<\/li>\n<li><strong>EXW looks cheap but isn&#8217;t.<\/strong> If your supplier quotes EXW, ask for FOB. The 2-5% difference saves you from arranging Chinese factory pickup and export clearance.<\/li>\n<li><strong>FOB is the standard for sea freight from China.<\/strong> It gives you control over shipping costs while the seller handles China-side logistics. This is the most common term for CNC parts orders.<\/li>\n<li><strong>DDP is simplest but most expensive.<\/strong> Use it for prototypes and first orders. Once you understand your country&#8217;s import process, switch to FOB or DAP and save 10-20% on every shipment.<\/li>\n<li><strong>The risk transfer point matters more than who pays.<\/strong> Under CIF, the seller pays freight \u2014 but the risk is yours from the moment the goods are loaded at the China port. If the ship sinks, you claim insurance, not the seller.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-group has-light-gray-background-color has-background is-layout-constrained wp-container-core-group-is-layout-e86b207e wp-block-group-is-layout-constrained\" style=\"border-color:#1e73be;border-width:2px;padding-top:20px;padding-right:24px;padding-bottom:20px;padding-left:24px\">\n\n\n<h3 class=\"wp-block-heading\">Need CNC Parts Shipped from China? Get a Quote with Clear Incoterms<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BravoFabs provides CNC machining, sheet metal fabrication, and welding with transparent FOB Shenzhen pricing. Every quote includes a breakdown by Incoterm \u2014 FOB, DAP, or DDP \u2014 so you know exactly what you&#8217;re paying for manufacturing and what&#8217;s shipping. We handle China-side export clearance and documentation. Serving industrial clients in Germany, the US, the UK, and across Europe.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-vivid-cyan-blue-background-color has-text-color has-background wp-element-button\" href=\"https:\/\/bravofabs.com\/contact\/\" style=\"border-radius:6px\">Request a Quote with Shipping \u2192<\/a><\/div>\n\n<\/div>\n\n\n<\/div>\n\n\n\n<div class=\"wp-block-group is-layout-constrained wp-container-core-group-is-layout-cbfb3306 wp-block-group-is-layout-constrained\" style=\"border-left-color:#2563eb;border-left-width:4px;border-left-style:solid;background-color:#f0f4ff;margin-top:32px;margin-bottom:0;padding-top:12px;padding-bottom:12px;padding-left:20px;padding-right:24px\">\n\n\n<h4 class=\"wp-block-heading\" style=\"font-size:15px;font-style:normal;font-weight:700;line-height:1.4;margin-top:0;margin-bottom:8px\">\ud83d\udd17 Related Manufacturing Services &amp; Articles<\/h4>\n\n\n\n<ul class=\"wp-block-list\" style=\"font-size:14px;line-height:1.7;padding-left:18px\">\n<li><strong><a href=\"https:\/\/bravofabs.com\/cnc-machining-service\/\">Precision CNC Machining Service<\/a><\/strong> \u2014 3-axis &amp; 5-axis milling, turning, FOB Shenzhen pricing<\/li>\n<li><strong><a href=\"https:\/\/bravofabs.com\/sheet-metal-fabrication-services\/\">Custom Sheet Metal Fabrication<\/a><\/strong> \u2014 laser cutting, bending, welding with transparent shipping terms<\/li>\n<li><strong><a href=\"https:\/\/bravofabs.com\/dhl-fedex-ups-shunfeng\/\">DHL vs FedEx vs UPS vs SF Express: International Shipping Guide<\/a><\/strong> \u2014 compare carriers for your shipment<\/li>\n<li><strong><a href=\"https:\/\/bravofabs.com\/quality-control-in-metal-fabrication\/\">Quality Control in Metal Fabrication<\/a><\/strong> \u2014 our QC process that ensures parts are right before they ship<\/li>\n<li><strong><a href=\"https:\/\/bravofabs.com\/tolerance-standards-in-metal-fabrication\/\">Tolerance Standards: ISO 2768 &amp; ASME Y14.5 Guide<\/a><\/strong> \u2014 specify tolerances right so QC passes first time<\/li>\n<\/ul>\n\n\n<\/div>\n<div class=\"rs-section\"><div class=\"rs-container\"><h2>Explore Related Manufacturing Services<\/h2><div class=\"rs-grid\"><div class=\"rs-card\"><a href=\"\/cnc-machining-services\/\">CNC Machining Services<\/a><p>Precision CNC milling, turning &amp; 5-axis machining.<\/p><\/div><div class=\"rs-card\"><a href=\"\/sheet-metal-fabrication-services\/\">Sheet Metal Fabrication<\/a><p>Laser cutting, bending, welding &amp; assembly.<\/p><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>International trade terms, commonly referred to as Incoterms, are a set of rules established by the International Chamber of Commerce (ICC). These terms define the responsibilities and obligations of buyers and sellers in international trade transactions, including transportation, insurance, and customs duties. Here are some common international trade terms: &#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"Incoterms 2020 Guide: EXW, FOB, CIF, DAP, DDP Explained for Importers | BravoFabs","_seopress_titles_desc":"Complete guide to Incoterms 2020 for manufacturing importers: EXW vs FOB vs CIF vs DAP vs DDP explained with practical examples for CNC parts, sheet metal, and welded assemblies shipped from China.","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"none","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"both","_seopress_redirections_param":"","_seopress_redirections_type":301,"_seopress_analysis_target_kw":"international trade terms incoterms","footnotes":""},"categories":[40],"tags":[47,46],"class_list":["post-1237","post","type-post","status-publish","format-standard","category-knowledge-base","tag-incoterms-2020","tag-international-trade-terms"],"_links":{"self":[{"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/posts\/1237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/comments?post=1237"}],"version-history":[{"count":6,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/posts\/1237\/revisions"}],"predecessor-version":[{"id":2888,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/posts\/1237\/revisions\/2888"}],"wp:attachment":[{"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/media?parent=1237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/categories?post=1237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bravofabs.com\/wp-json\/wp\/v2\/tags?post=1237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}