Choosing the right trade terms is crucial in international trade—it affects your cost control, delivery efficiency, and risk management. When sourcing from China, it's highly recommended using FOB (Free on Board) or EXW (Ex Works) terms. Here's why:

✅ Greater Control Over the Shipping Process

By choosing FOB or EXW terms, you gain full control over your shipment. From factory pickup, export customs declaration, international shipping, to destination port clearance and delivery—you can select a reliable freight forwarder who meets your specific requirements. This prevents you from passively accepting arrangements made by the seller and avoids issues caused by information asymmetry.

✅ Transparent and Predictable Logistics Costs

Although CIF and DDP terms may seem more convenient, they often come with hidden charges at the destination port, such as high handling fees (destination port charges) or mandatory use of designated agents, which can lead to uncontrollable costs. Under FOB/EXW, all charges are clear and itemized, allowing you to compare prices, manage your budget precisely, and avoid surprise costs.

✅ More Professional and Compliant Clearance and Delivery

For destinations like Australia, where customs compliance is strict, having control over the clearance process is essential. With FOB/EXW terms, you can proactively prepare documentation and coordinate with a local customs broker of your choice. For example, you can coordinate with a trusted local broker—such as our Australian branch, Phoenix Supply Chain Pty Ltd, has in-depth knowledge of local regulations and can assist in ensuring a smooth and compliant clearance process—helping you avoid delays or penalties due to incorrect paperwork.

✅ Reduced Transport Risk, Enhanced Cargo Safety

Under CIF or DDP, the seller usually outsources shipping to a third-party freight forwarder and tends to choose the lowest-cost option to reduce expenses. This can result in delayed shipments or even cargo damage. FOB/EXW allows you to work directly with a trusted logistics partner, ensuring better service quality and cargo security.

✅ Avoid Middleman Markups

Most suppliers in China are not logistics professionals—they typically rely on third-party freight forwarders to arrange shipping. Under CIF/DDP terms, they often add a profit margin to logistics costs, while lacking the expertise to handle complex shipping issues. Working directly with a professional freight forwarder helps reduce costs and gives you access to more responsive and knowledgeable support.

This is the strategy we've refined through years of practice in China–Australia logistics. FOB and EXW give you more control, fewer surprises, and better results.