# FOB vs EXW for China Sourcing | Cheery Supply Chain

> FOB and EXW change who carries cost, risk and paperwork in a China sourcing order. A practical comparison, with the questions to ask before you accept.

Source: https://luressource.com/insights/fob-vs-exw-for-china-sourcing/

FOB and EXW are not two prices for the same thing. They are two different scopes of work, and confusing them is one of the most common ways a sourcing comparison goes wrong. The practical difference EXW (Ex Works) FOB (Free On Board) Supplier delivers to Their own factory gate Named port, loaded on board Export clearance Buyer's responsibility Supplier's responsibility Inland freight Buyer Supplier Terminal handling Buyer Supplier Best suited to Buyers with a forwarder already in China Buyers who want one fewer moving part Why the comparison is so often wrong An EXW quote looks cheaper because it is smaller. Add inland trucking, export documentation and terminal charges, and the two can converge — or reverse, because a factory with volume gets better inland freight rates than a small buyer does. Questions that resolve it in one email Which port is named, and is terminal handling included? Is export documentation and customs clearance included? What is the inland freight from factory to port, per container? What is the quoted validity period, and what triggers a re-quote? A note on our own data Supplier records on this site state a price basis explicitly. Where a factory cannot state one, the record shows "on request" — we do not publish a price that cannot be compared with another price. What each basis includes 3 fields must be stated before any two quotes are comparable: unit, order quantity and basis. Cost line EXW FOB Inland freight to the port Buyer Seller Export clearance and documentation Buyer Seller Terminal handling at origin Buyer Seller Loading on board the vessel Buyer Seller How do you make two quotes comparable? Write the unit down: per piece, per set or per carton —a price without a unit is not a price. Write the order quantity down: the same product at 5,000 and 50,000 pieces carries the same tooling across different volumes. Write the basis down: FOB with a named port, or EXW at the factory. Convert one to the other before comparing, then compare against the band for the sub-category. Keep the freight and duty question separate —the basis decides who pays them, not how much they are. What do the bands look like by sub-category? Reference price bands by sub-category, aggregated from 62 sampled listings. Basis must be confirmed per quotation (FOB port or EXW factory). Sub-category Sample size Reference price band (US$ / unit) Median low MOQ band (pcs) Category Fishhook 9 0.07 – 2.40 / piece 0.65 100 – 2,000 Fishing Accessories Spoon & Spinner 6 0.31 – 6.00 / piece 1.25 50 – 500 Fishing Lures Other Hard Lure 6 0.56 – 12.04 / piece 2.95 20 – 500 Fishing Lures Soft Lure 6 0.20 – 3.85 / piece 1.55 50 – 1,000 Fishing Lures Hard Lure 6 1.85 – 3.20 / piece 2.60 100 – 100 Fishing Lures VIB 6 0.24 – 2.50 / piece 1.39 100 – 500 Fishing Lures Minnow 6 0.37 – 3.17 / piece 1.40 50 – 500 Fishing Lures Metal Jig 5 0.97 – 2.01 / piece 1.39 100 – 200 Fishing Lures Fishing Rod 3 9.15 – 132.55 / piece 28.05 20 – 100 Fishing Rods Crankbait 3 0.30 – 0.85 / piece 0.66 200 – 500 Fishing Lures Octopus Skirt 3 0.08 – 2.80 / piece 0.98 100 – 2,000 Fishing Lures Fishing Accessory 3 0.62 – 60.00 / pack 9.62 5 – 200 Fishing Accessories What does each basis shift onto the buyer? EXW: inland freight to the port. EXW: export clearance and documentation. EXW: terminal handling at origin. EXW: loading on board the vessel. FOB: none of the above —the seller carries them to the rail. What does the rest of the journey actually cost? Drewry World Container Index spot rates, 10 September 2026, per 40ft container. Rates move weekly, so read these as an order of magnitude rather than a quotation. Lane Rate per 40ft Week on week Port-to-port transit Composite index, all lanes US$4,476 unchanged — Shanghai to Los Angeles US$7,352 +2% 13.9 to 14.0 days Shanghai to New York US$9,726 +1% 30 to 40 days Shanghai to Rotterdam US$3,997 -2% 30.3 to 32.9 days Two conclusions follow. Ocean freight is the largest single line inside the EXW-to-FOB gap, and it swings weekly: the same container cost US$3,997 or US$9,726 depending only on the destination port. And a quote that does not name the port cannot be compared, because the spread between Los Angeles and New York is wider than most factories' entire margin. Charges that sit outside the goods price on a US import. Fees are US Customs and Border Protection figures for fiscal 2026; duty rates are the general (MFN) rates in the Harmonized Tariff Schedule for heading 9507. Charge Rate Who pays under FOB US duty, fishing rods (9507.10.00) 6% of value Buyer US duty, fish hooks (9507.20) 4% snelled, 4.8% other Buyer US duty, fishing reels (9507.30) 3.9% to 9.2%, or 24 cents each in the middle tier Buyer US duty, terminal tackle (9507.90) 3.7% line, 5% landing nets, 5.6% casts and leaders, 9% artificial baits Buyer Merchandise Processing Fee 0.3464% of value, minimum US$33.58, maximum US$651.50 Buyer Harbor Maintenance Fee 0.125% of value on ocean imports Buyer Customs broker entry fee US$150 to US$400 per formal entry Buyer Continuous customs bond US$400 to US$1,200 per year Buyer Marine cargo insurance 0.30% to 0.50% of cargo value Buyer under FOB, seller under CIF Importer Security Filing Due 24 hours before the cargo is loaded aboard Buyer The duty figures above are the general rates only. Section 301 measures on Chinese-origin goods, and any other trade measure in force, are additional and are not included; confirm the applied rate for your entry before you build a landed-cost model on it. Under CIF the seller must insure at a minimum of 110% of the contract price on Institute Cargo Clauses (C) cover. That is a floor rather than a recommendation, and clause (C) is the narrowest of the three standard sets: it excludes theft, water damage and non-delivery. A buyer who cares about the cargo usually insures it separately. What goes wrong when the basis is missing? Two suppliers quote 8% apart and both are telling the truth, because the scopes differ. A buyer compares an EXW number with an FOB number and rewards the wrong factory. Freight is added twice, once by the factory and once by the forwarder. The landed-cost model is built on a number that was never a landed cost. Frequently asked questions Which is cheaper, FOB or EXW? Neither is inherently cheaper; they price different scopes. An EXW price excludes inland freight, export clearance and terminal handling, all of which someone still pays. Compare landed cost at the same Incoterm, otherwise you are comparing a partial price with a complete one. Which term should a first-time buyer use? FOB is usually the easier starting point, because the supplier handles export clearance and delivers to the port, so fewer parties have to be coordinated by a buyer who has no local presence. Does the term affect the price the factory quotes? It should, but watch for EXW prices that quietly include domestic delivery, or FOB prices that exclude terminal charges. Ask what is explicitly included rather than assuming the term is applied strictly.