When sourcing products from China, buyers often encounter two of the most frequently used Incoterms: FOB vs EXW. While most online guides explain the textbook meaning of each term, what importers actually want to know is much more practical:
Which term saves money? Which one reduces risk? And which one gives you more control when working with Chinese suppliers?
This guide breaks down the process from a freight forwarder’s perspective, based on daily operations involving general cargo, oversized shipments, special containers, and hazardous goods.
What do FOB and EXW actually mean? (In brief)
The supplier handles export clearance and delivers the goods onto the vessel at the port of loading. Risk transfers once the cargo is on board.
You, or your freight forwarder, take responsibility from the factory door. Your supplier only has to prepare the goods for pick-up. Everything else is on you.
That’s the textbook version. The practical differences go far beyond that.FOB vs EXW: The differences most importers learn the hard way
1. Control vs convenience
FOB = More control over the international freight
You choose your forwarder, routes, and costs. The supplier simply delivers the goods to the port for export.
EXW = Maximum control, sometimes more than you want
Under EXW, you’re responsible for everything, including export paperwork, truck loading, and customs formalities—tasks many buyers don’t actually want to manage.
For new importers, EXW can create too much control, introducing avoidable risks and complications.
2. Who pays for what? The costs most buyers miss
Hidden charges under EXW
Under EXW, buyers must pay for:
- China’s domestic trucking
- Factory loading fees (yes, many suppliers charge for lifting pallets onto the truck)
- Export documents
- Customs clearance
- Terminal charges and handovers
Your total cost may be far higher than the “cheap EXW price” quoted.
Hidden charges under FOB
FOB seems safer, but factories sometimes build these into their price:
- “FOB handling” markups
- Extra warehouse charges
- Dock fees
- Late export filing penalties (if they miss the cut-off)
Not all factories do this, good suppliers don’t, but it’s common.
Takeaway: EXW seems cheaper at first glance. FOB usually costs less in the end.
3. Risk transfer: The most misunderstood part
Under EXW
Risk transfers at the factory.
If your forwarder arrives and the cargo is damaged, mislabeled, or impossible to load, what happens?
That’s on you.
If the cargo is not ready on time, and your truck is waiting?
Also on you.
Additionally, pick-up delays are common if the warehouse is busy. You must also ensure the forwarder has all the clearance documents on time.
Under FOB
Risk transfers at the port after loading onto the vessel.
It means:
- The supplier must fix any export-side problems
- The supplier handles issues during truck pick-up
- Supplier absorbs the cost if they miss customs documentation
- Damage caused before loading is their responsibility
In short, FOB reduces early-stage risk, while EXW gives you more control but requires a more experienced logistics setup. With ASLG, you can gain a smooth, one-stop shipping solution from China to destinations worldwide.
4. Supplier behavior in China (The part most guides forget)
Smaller factories typically prefer EXW because:
- They avoid responsibility for export procedures
- They don’t need to prepare export documents
- They don’t have to coordinate with freight forwarders
- They reduce the risk of disputes or shipment delays
- EXW is essentially the “easy mode” for them
Larger exporters and trading companies often prefer FOB because:
- They can work with their own partnered freight agent
- They may receive rebates or commissions from that agent
- They can influence your choice of a forwarder
- They maintain tighter control over shipment timelines
- FOB lets them manage logistics in a way that aligns with their internal processes
Industry-specific recommendations
- FOB: Best for new buyers—simplifies China-side operations and reduces early-stage risk.
- EXW: Suitable for experienced importers or those with reliable local agents who want full cost transparency and tighter control.
- FOB: Recommended when the supplier has proper lifting equipment and knows the loading requirements.
- EXW: Better if your forwarder needs to supervise loading, check securing methods, or ensure safe movement of heavy machinery.
Special containers (Open top, flat rack, reefer)
- FOB: Usually safer and more efficient because suppliers handle container preparation, special equipment coordination, and port-side compliance.
Dangerous goods (DG)
- FOB: The supplier manages DG paperwork and labeling effectively when they have the proper experience.
- EXW: Better if the supplier lacks DG knowledge; using your own specialized forwarder minimizes compliance risks.
High-value electronics or Amazon shipments
- FOB: Fewer handovers mean fewer opportunities for damage or miscounts.
The choice between FOB vs EXW depends on your cargo type, supplier capabilities, and the level of control you need. As a trusted forwarder, we tailor every solution to your specific shipping requirements, keeping your cargo safe, on schedule, and fully optimized from start to finish.
FOB vs EXW: Quick comparison table
| Factor | FOB | EXW |
|---|---|---|
| Supplier Responsibilities | Export docs, trucking to port, loading onto vessel | None after making goods available |
| Buyer Responsibilities | Freight, import clearance, delivery | Everything from pickup to delivery |
| Control Level | High | Very high |
| Risk Transfer | When goods are loaded on vessel | At factory door |
| Hidden Costs | Supplier markups possible | Many local China handling costs |
| Best For | New importers, DG, oversized cargo, Amazon shipments | Buyers with China agents, experienced importers, DDP workflows |
| Supplier Preference | Moderate | Very high |
| Typical Total Cost | Lower or predictable | Higher unless managed carefully |
FOB vs EXW: Which One Should You Choose?
Choose FOB if you:
- Are new or moderately experienced
- Want predictable costs
- Ship LCL/FCL regularly
- Handle Amazon or eCommerce cargo
- Need the supplier to take responsibility for export issues
Choose EXW if you:
- Have a China office or a trusted local agent
- Want complete cost transparency
- Ship from multiple suppliers for consolidation
- Use a DDP-style workflow or door-to-door service
How can Airsupply support you?
If you’re unsure whether FOB or EXW is better for your shipments, we’re here to assist. We’ll review your route, cargo volume, and supplier practices to identify the safest and most cost-effective option.
Whether it’s general cargo, oversized goods, special containers, or dangerous goods, we make the process simple and predictable.
