FOB, CIF or DAP for a small mixed order
A first order across several product lines is often too small for a full container and too large for a courier envelope. The delivery term you choose decides where risk passes to you, who books the freight, who insures it, who arranges fumigation and when you pay. Here is how each term works on a small mixed order from us, and how to pick one.
- For importers, shops and Amazon sellers
- Incoterms 2020
- About 6 minutes to read
The short version
We quote FOB, CIF or DAP, and FCA on request. Which one fits depends mostly on two things: whether you already have a forwarder, and whether the order goes by air, in a shared container (LCL) or in a full container (FCL). The basics of air versus LCL versus FCL, and the "we handle / you handle" split for each term, are in how to build one mixed order. This guide goes one level deeper: risk, insurance, fumigation and payment.
FOB: risk passes on board in Vietnam
Under FOB, risk passes to you when the goods are on board the vessel at the Vietnamese port. We clear export customs and load; your forwarder carries the goods and you pay the ocean freight, so the B/L reads freight collect. You decide whether to insure the voyage.
For shared-container (LCL) goods handed over at your forwarder's warehouse, Incoterms 2020 suggest FCA rather than FOB. We can quote either; ask your forwarder which they prefer.
A real case: an Amazon seller selling in the United States books their own forwarders. We packed the goods, cleared export customs in our name and delivered the cartons to the forwarder's consolidation warehouse for a shared container. We work to the forwarder's schedule and send them the same invoice and packing list the buyer approves.
On FOB, your forwarder also arranges fumigation if your market needs it. We confirm that with them in writing as soon as there is a booking.
CIF: we book freight and insurance to your port
CIF suits buyers without a forwarder in Vietnam who are happy to take over at their own port. We book the freight with our forwarder, the B/L reads freight prepaid, and we buy cargo insurance. Our forwarder also arranges fumigation. Risk still passes to you on board in Vietnam; the insurance is there so you can claim for loss after that point.
A real case: a repeat wholesale buyer in Germany buys CIF in a shared container. We booked the freight and insurance; the buyer's own agent handled arrival.
Know what the insurance covers
Under Incoterms 2020, CIF only obliges the seller to buy minimum cover, the narrowest standard cargo clauses, for 110% of the contract value. Minimum cover does not pay for moisture, mould, cracking or breakage, which are exactly the problems natural products can have. If you want wider cover, arrange it yourself. And cargo insurance is not product liability insurance: it covers goods lost or damaged in transit, nothing else.
DAP: delivered to your door, duties stay with you
Under DAP, risk passes at the place you name, with the goods ready for unloading. We arrange export customs, freight and delivery, and our forwarder arranges fumigation if needed. You handle import customs and duties, and you unload. Incoterms 2020 define FOB and CIF for sea and inland waterway transport only, so our air shipments go on DAP terms.
Import duties change often and differ by product, so we recommend DAP over a term where the seller pays your duties: you stay in control of the duty, through your own customs broker. Tell us in writing who clears customs at your end before we ship.
When you pay
- FOB and CIF: T/T, 50% deposit with the order, 50% balance when you receive the draft B/L. The B/L is released once the balance is received.
- Air shipments on DAP terms: 50% deposit, and the balance once the goods are ready, before pickup.
For production time, see the production time table. Shipping time is extra. How the draft B/L and release work is explained in how to read a bill of lading from Vietnam.
A quick way to choose
- A few cartons, or samples: air, DAP.
- Pallets, and you would rather we book: LCL, CIF.
- A full container, your forwarder: FCL, FOB.
- A full container, we book: FCL, CIF.
- Amazon FBA: a carrier booked through your Amazon account, your own forwarder, or a quote from us. Packing by material is in packing natural pet toys for FBA.
Terms can also combine in one order. One shipment went as a 20 ft container, FOB Vietnam, bound for Gdańsk, while one carton per SKU went ahead by air for a trade fair.
What to tell us for a quote
- The lines, sizes and rough quantities.
- Your destination: port, warehouse or full address.
- The term you prefer, or "not sure".
- Whether you have a forwarder or customs broker, and the documents they need. See EU export documents for pet toys.
If moisture during a long voyage worries you, read coffee wood moisture, 14% at the core before choosing how much insurance to buy.
Questions buyers ask about FOB, CIF and DAP
When does risk pass to me under FOB?
When the goods are on board the vessel at the Vietnamese port.
Can I use my own forwarder?
Yes. Your forwarder carries the goods under FOB. We clear export customs in our name.
Does CIF insurance cover moisture or cracking?
No. CIF requires only minimum cover, which does not pay for moisture, mould, cracking or breakage. Arrange wider cover if you need it.
Who pays import duties under DAP?
You do, through your own customs broker. We arrange export customs, freight and delivery to your named place.
When is the balance due?
On FOB and CIF, when you receive the draft B/L. On air shipments under DAP, once the goods are ready, before pickup.
Get a quote for your mix
Tick the lines you want and tell us your destination. We suggest the route and the term that fit.