Your quote depends on the Incoterm. This guide explains EXW, FOB, CFR (C&F) and CIF in plain English: who arranges and pays for each step, and where the risk passes to you.
Prices for fabric depend on the article, the quantity, the colours and the Incoterm. The Incoterm decides which costs are in the price, who arranges each step of the journey, and at which point the risk of loss or damage passes from seller to buyer.
We quote under four rules: EXW, FOB, CFR (also written C&F) and CIF. This guide explains them in plain English, based on the Incoterms® 2020 rules published by the International Chamber of Commerce (ICC). It is a summary, not legal advice; the ICC text is the reference.
The four rules at a glance
| EXW | FOB | CFR (C&F) | CIF | |
|---|---|---|---|---|
| Full name | Ex Works | Free On Board | Cost and Freight | Cost, Insurance and Freight |
| Named place | Seller's premises | Port of shipment | Port of destination | Port of destination |
| Export clearance | Buyer | Seller | Seller | Seller |
| Loading on the vessel | Buyer | Seller | Seller | Seller |
| Main sea freight | Buyer | Buyer | Seller | Seller |
| Cargo insurance | Buyer's choice | Buyer's choice | Buyer's choice | Seller (minimum cover) |
| Risk passes to the buyer | When the goods are made available at the seller's premises | When the goods are on board the vessel at the port of shipment | When the goods are on board the vessel at the port of shipment | When the goods are on board the vessel at the port of shipment |
| Import clearance and duties | Buyer | Buyer | Buyer | Buyer |
EXW — Ex Works
The seller makes the goods available at its premises or another named place. The buyer arranges, and pays for, everything from there: loading, export clearance, transport, insurance and import. EXW gives the buyer the most control and the most work. It suits buyers with their own forwarder in China.
FOB — Free On Board
The seller clears the goods for export and loads them on board the vessel the buyer has nominated, at the named port of shipment. From that moment the risk passes to the buyer, who pays the sea freight, insurance and everything after. FOB is a common choice for buyers who have a freight forwarder and want to control the main transport.
CFR or C&F — Cost and Freight
As FOB, but the seller also books and pays the sea freight to the named port of destination. Note that the risk still passes when the goods are on board at the port of shipment, even though the seller has paid the freight. Insurance for the sea journey is the buyer's choice.
CIF — Cost, Insurance and Freight
As CFR, but the seller also buys cargo insurance for the buyer for the sea journey. Under Incoterms® 2020 the minimum cover under CIF is limited (Institute Cargo Clauses C, or similar). If you need broader cover, agree it in the contract or insure it yourself. As with CFR, the risk passes when the goods are on board at the port of shipment.
Points to agree in every quote
- Name the place precisely. For example "FOB" followed by the named port of shipment, or "CIF" followed by the named port of destination. We confirm the place in your quote.
- The Incoterm is not the payment term. Payment terms are agreed separately, in the proforma invoice and the contract.
- Ownership is a separate question. Incoterms deal with costs, tasks and risk, not with when ownership of the goods passes.
- Import is always on the buyer's side under these four rules: import clearance, duties and taxes at destination, and onward transport.
- Container cargo. FOB, CFR and CIF were written for goods loaded on board a vessel. The ICC notes that other rules exist for goods handed over at a container terminal. If that matters for your shipment, discuss it with your forwarder.
How quotes work with dé
Tell us the article, quantity, colours and destination, and which of EXW, FOB, CFR (C&F) or CIF you prefer. We share pricing and terms with the samples, as step 2 of how we work. MOQ, price and lead time are on request for each article.
This guide is a general summary of four Incoterms® rules. Incoterms® is a registered trademark of the International Chamber of Commerce.