Choosing Between EXW, FOB, and Other Pricing Terms

When requesting a quote for shipping, it’s important to consider which pricing term is most advantageous: EXW, FOB, or another option. EXW (Ex Works) represents the most basic price, indicating that the goods are ready for loading at the supplier’s location. Beyond this point, responsibilities like carriage to the seaport, customs declaration, sea shipping, and insurance fall to the buyer, typically managed by the buyer’s forwarding agent.

However, it may be beneficial to request a FOB (Free On Board) quote from your supplier as well. This allows for a direct comparison with your forwarder’s quote, helping you determine the most cost-effective option.

Our consolidation service introduces another dimension to this decision-making process. With this service, your goods are first shipped to our warehouse. In this scenario, you might consider asking your supplier for an FCA (Free Carrier) quote, which includes the cost of carriage to a specified destination, in this case, our warehouse.

Why might a supplier’s quote for carriage be more competitive? Generally, factories in China maintain strong relationships with transportation companies, benefiting from their status as major clients due to their volume of business and securing favorable rates. Additionally, factories often choose not to mark up carriage fees, aiming to keep their products competitively priced.