# FOB vs EXW Costs | Freight, Duty and What Goes Wrong

> What freight, insurance, duty and handling add between the factory gate and your warehouse, what goes wrong when the basis is missing from a quotation, and

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

Direct answer. The basis decides who pays for the distance between the factory gate and your warehouse. This page puts numbers on that distance, and on the failure that happens when a quote never states which end it covers. Key facts. 1) The basis decides who pays for the distance between the factory gate and your warehouse. 2) Three consequences follow from that table, and each changes how a comparison should be read. 3) A number without a basis is not a price, and the failures that follow are consistent enough to name. 4) The most common is a comparison between two different scopes . 5) None of these is a supplier behaving badly. What the rest of the journey costs Direct answer The basis decides who pays for the distance between the factory gate and your warehouse. This page puts numbers on that distance, and on the failure that happens when a quote never states which end it covers. Key facts The basis decides who pays for the distance between the factory gate and your warehouse. Three consequences follow from that table, and each changes how a comparison should be read. A number without a basis is not a price, and the failures that follow are consistent enough to name. The most common is a comparison between two different scopes . None of these is a supplier behaving badly. The basis decides who pays for the distance between the factory gate and your warehouse. That distance has a number attached to it, and the number is usually larger than the difference a buyer was trying to measure between two suppliers. What the rest of the journey costs The cost lines that sit between an EXW factory and your warehouse. Ranges are typical for fishing tackle; a quote is not a substitute for a forwarder's rates. Line Who pays under EXW Who pays under FOB Typical scale Inland freight to the port You Factory Often the largest single difference between the two bases on a small order Export clearance and documentation You Factory Fixed per shipment, so it hurts small orders disproportionately Terminal handling and loading You Factory Charged per container or per cubic metre Sea freight You You Volumetric for lures, weight-driven for rods and jigs Marine insurance You You A small percentage of declared value Import duty You You Set by the destination market and the HS heading, not by the supplier Port charges and delivery to warehouse You You Fixed per shipment again Three consequences follow from that table, and each changes how a comparison should be read. The lines that sit between EXW and FOB are mostly fixed per shipment , so the gap between the two bases shrinks as order size grows and is proportionally largest on the smallest order. Duty and freight are not the factory's to control , which is why they never appear on a factory quotation even when the buyer is comparing landed cost. And volumetric weight decides which lines dominate: a container of soft plastics runs out of space before it runs out of weight, while a container of jigs runs out of weight first. What goes wrong when the basis is missing A number without a basis is not a price, and the failures that follow are consistent enough to name. The most common is a comparison between two different scopes . A supplier quoting EXW and a supplier quoting FOB produce numbers that differ by the inland freight, clearance and loading — a difference that has nothing to do with the product and can easily exceed the margin being negotiated. The second is a budget built on the lower number : the landed cost turns out to be materially higher than the quotation suggested, and the gap is discovered after the order rather than before it. The third is an argument about who arranges what after production has started, which is the worst moment to discover that nobody booked the inland leg. None of these is a supplier behaving badly. A basis omitted from a quote is usually a basis omitted from the enquiry, and the fix is one line in the first email. How to make two quotes comparable Four steps, and the third is the one buyers skip. Ask for the same basis. Pick FOB or EXW and ask both suppliers to quote on it. Where a factory only quotes one, ask it to quote the other as well — the conversion is arithmetic and the factory already knows the numbers. Match the quantity and the specification. Two quotes at different order quantities are not comparable regardless of basis, because the setup cost is spread differently; nor are two quotes with different materials or different hardware. Ask the price to fall as quantity rises. Request the unit price at two or three quantities and note where the reduction flattens. The point at which it stops falling is the point at which you are covering material rather than setup, and it tells you what the real minimum is. Add the destination costs yourself. Freight, insurance and duty are the same for both suppliers in most cases, so including them does not change the ranking — but knowing them turns a quote into a landed number you can budget against. What the bands look like by sub-category The reference bands published on this site are stated per sub-category with their unit and the quantity they apply to, which is the same discipline a quotation needs. They exist to tell you whether a corrected quote is plausible, not to replace the correction. Two habits make them useful rather than misleading. Read the band only after the basis and the quantity are fixed, because a band read against an EXW number is off by the inland leg. And treat a material difference between two suppliers as information about the specification before treating it as information about the price — in tackle, the hardware and the body material explain most of the spread that looks like a margin difference. 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 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. Where this sits in the process This page is one topic out of the verification standard. The overview is FOB vs EXW for China sourcing . Where to next Product catalogue Sample listings with price per unit Verified directory Factories that passed 4 verification gates How sourcing works Six steps, timing, failure modes Price benchmark Reference bands and MOQ tiers Updated 2026-09-12 Scope Fishing tackle sourcing Sources 1 cited Was this page useful? Yes, useful Not really Sources Incoterms definitions follow the current rules of the International Chamber of Commerce; this page covers sourcing practice only