Incoterm Comparison Table
| Term | Seller Responsibility Ends | Typical Use Case | Aussie Importer Considerations |
|---|---|---|---|
| EXW | Goods ready at factory door | Experienced shippers with China agent | You manage pickup, export clearance, VGM |
| FOB | Goods loaded on vessel/plane | Most SMEs | Supplier handles export formalities, you choose carrier |
| CIF/CFR | Freight paid to Australian port only | When you want supplier to book sea freight | You still pay local port & customs charges |
| DAP/DDP | Delivered to Aussie address (duties optional) | Hands-off importers | Check who is IOR and ensure compliance |
Choosing the Right Term
- If you need rate transparency – go FOB and let Spotyard quote door-to-door so you can compare true landed cost.
- If your supplier has better peak season access – consider CFR but insist on carrier visibility and fixed cutoff times.
- If you’re new or time-poor – DAP/DDP makes sense, but ensure your ABN is used so you can claim GST credits.
Risk Allocation Cheat Sheet
- •Insurance: Under FOB the buyer arranges marine cover; under CIF the seller must provide minimum cover (Institute Cargo Clauses C) which may be insufficient.
- •Customs penalties: Even if you accept DDP, ABF can pursue your business for misdeclared HS codes—verify paperwork.
- •Demurrage: Under CFR/CIF, delays at Australian ports are still your cost; include free time clauses in contracts.
Negotiation Tips
- •Ask suppliers for both FOB and DDP quotes so you can see embedded freight margins.
- •Request proof of export clearance fees when buying EXW to avoid double charges.
- •Document Incoterms in purchase orders and proforma invoices to avoid disputes.
Quick Decision Flow
- Do you have a trusted forwarder? → Yes → Choose FOB.
- Do you have multiple factories shipping small parcels weekly? → Yes → Consider DAP with consolidated express.
- Are you testing a new product with minimal volume? → Yes → Use DDP for the trial, then shift to FOB once volumes scale.
Talk to an Incoterms Specialist | Download FOB Checklist
How Spotyard Helps
Spotyard Sourcing & Logistics runs dedicated China → Australia sea, air, and express programs. Importers get:
- •Weekly capacity on major lanes with negotiated carrier rates
- •Managed customs clearance with ABF/DAFF coordination
- •Live milestone tracking, demurrage alerts, and delivery scheduling