FOB vs CIF vs DDP: Choosing Terms for Furniture Imports

2026-09-10 · Comparisons · Rosy Rose Trade Journal

FOB vs CIF vs DDP: Choosing Terms for Furniture Imports

Two buyers can purchase the same bedroom programme from the same Foshan line, pay almost the same factory price, and end up with landed costs that differ by a double-digit percentage. The gap is rarely the unit price. It is the trade term, the freight booking, the insurance basis and who absorbs the charges that appear after the vessel sails.

This is a commercial decision, not a paperwork detail. It determines who controls the sailing schedule, who can claim on damage, where your cash sits for the six weeks a container is at sea, and which party the customs authority will pursue when an entry is wrong. The comparison below is built for importers, contract dealers and project buyers placing furniture orders in FCL and LCL volumes. In our experience at Rosy Rose — quoting against drawings on hotel, contract and project programmes across 125+ countries since 1983 — the buyers whose landed costs are predictable are the ones who pick the trade term deliberately, not the ones who let the factory default the choice.

The Three Terms, Stripped to Their Decisions

FOB - Free On Board (named port of loading)

The seller delivers the goods on board the vessel at the named Chinese port and clears them for export. From that moment, risk and cost belong to you. You book the freight, choose the carrier, arrange marine insurance and handle everything at destination, including import customs and duty.

Practical effect: you control the sailing date, the routing and the consolidation, which matters when a project installation date is fixed. Your landed cost is transparent because every freight invoice arrives in your own accounting system. The trade-off is administration: you need a freight forwarder, a broker and someone who watches container pick-up windows and free time.

CIF - Cost, Insurance and Freight (named port of destination)

The seller pays the ocean freight to the destination port and provides cargo insurance, in addition to clearing export. That looks like a door-to-door service and it is not. The second word pair is the one buyers miss: risk still transfers when the goods are on board at the port of loading, exactly as under FOB. The seller has arranged the journey, but you own the goods during the journey.

Two further points. The insurance attached to a CIF sale is a minimum cover: Institute Cargo Clauses (C) at 110% of the CIF value unless the contract says otherwise. And at destination you still pay the destination terminal charges, customs clearance and duty. CIF gives you one invoice and less administration; it does not give you protection at destination.

DDP - Delivered Duty Paid (named place of destination)

The seller delivers to an agreed place in your country, clears import, and pays duty and any import taxes that the term requires. It is the maximum obligation a seller can accept. For a hospitality project with a fixed delivered budget, DDP converts the whole exercise into a single line in your cost plan.

The constraint is structural. The seller needs either a local entity or a reliable customs arrangement in your market, and duty is calculated on the declared value, so you should know what value is being declared. Some markets restrict who may act as importer of record, and in others only a locally registered buyer can use particular import reliefs. Where you have your own broker and duty scheme, DDP usually gives away control you would rather keep.

Side-by-Side Comparison

Also worth knowing: the ICC recommends FCA rather than FOB for containerised cargo, because with FCL goods the seller's delivery obligation ends before the container is on board. Many factories still quote FOB out of habit, and it works in practice, but for LCL and FCL shipments it is worth asking for FCA terms and comparing.

Where the Money Actually Hides

The ex-works price is the smallest variable. Ask about each of these before you choose a term, because they move between quotes more than the unit price does.

• Origin charges. Inland haulage to the port, export documentation, terminal handling at origin. Under FOB they are inside the FOB price; under DDP they are invisible.
• Free time at destination. Daily demurrage and detention charges apply once free days expire. Whoever holds the bill of lading controls that clock, so know who it is.
• Insurance basis. Clause (C) covers catastrophe, not scratches or crush damage. For furniture, a programme clause with breakage and handling cover is often worth the premium.
• Volume and weight. Casegoods move by cube; upholstery moves by cube with light weight. A heavy stone or marble dining programme stacks dense and compresses into fewer cubic metres, which changes how much of a CIF freight rate you are really paying for.
• Duty valuation under DDP. Confirm what value is declared and whether you can claim back any indirect tax.
• Payment linkage. A 30% deposit against documents with the balance before shipment ties your cash to production, not to arrival. Align the payment milestones with the term you choose.

Choosing by Buyer Profile

Buying your first container, one market, no freight contract. Ask for FOB and use your own forwarder, even if the factory's CIF rate looks lower. You will learn your landed cost properly the first time, which is cheaper than learning it during a dispute.

Running a recurring programme with fixed installation dates. FOB or FCA plus a nominated forwarder. You control the sailing, you can consolidate multiple suppliers, and you can hold the factory to a production deadline rather than a vessel deadline.

A hotel or developer package with a contracted delivered budget. CIF if you have import capability and want the freight element simplified; DDP if the project cannot tolerate customs administration on your side and the seller can clear efficiently.

Reselling into a market where you hold a duty advantage. Stay on FOB or FCA and keep the import leg. Giving that advantage to a seller through DDP wastes it.

The Clauses to Write Down

Whichever term you select, the contract should state the following explicitly.

• The named port or place, complete with the full Incoterms version, for example FOB Shenzhen or DDP Hamburg, Incoterms 2020.
• The insurance basis and the insured value, if the seller arranges cover.
• Who is the importer of record and who appears on the customs documents.
• The free time allowed at origin and destination, and who pays if it is exceeded.
• The inspection point: pre-shipment inspection at the factory is a separate matter from the trade term and should be agreed in the same contract. The working method for remote inspection is documented separately.
• The claims deadline for visible damage and for concealed damage, with the evidence each requires.

How Terms and Programme Geometry Connect

In our experience, the trade term only behaves predictably when it is set alongside the freight geometry. A Dorata, Ginevra or Selene programme is quoted against drawings at our 200,000m² factory in Foshan, with packed volume per unit calculated against the same drawing. That is what makes a CIF quote defensible: the seller is pricing a known cubic metre against a known rate, not absorbing risk in the unit price. The 10-year structural warranty and the 2-year surface warranty (with ongoing refinishing support) sit on the FOB or DDP order, not on the freight quote, because they describe the goods, not the journey. When the term and the geometry are agreed together, the landed cost stops surprising anyone.

FAQ

Can I switch terms between orders?

Yes, and it is often sensible. Use FOB while you build your own freight and customs capability, then move selected projects to DDP when a buyer demands a delivered price. Just make sure each purchase order states the term rather than relying on a master agreement written for a different one.

Does CIF mean the seller is liable for damage in transit?

No. Risk passes at the port of loading, and the seller's only remaining obligation is to have arranged the minimum insurance cover. The claim runs against the insurer, and the quality of the insurance the seller bought becomes your problem.

What about EXW and DAP?

EXW puts almost everything on you, including loading at the factory, which is rarely the cheapest route. DAP delivers to your named place with import duty still yours, making it the middle step between CIF and DDP. Both are workable, but neither fixes the destination charges issue that sits behind most landed-cost surprises.

Get a Term-by-Term Quote

Send us a target specification, a destination port and your preferred term, and our export desk will price the order on all three bases so the comparison is yours to make on your own numbers.

We quote all three terms from the same cost sheet, so the difference you see is genuinely the freight, insurance and duty element rather than a padded price. Buyers comparing FOB with DDP usually do the arithmetic against a mixed consignment — casegoods, stone tables and lounge seating — which is where CIF quietly stops being cheaper. The mix we see most often consolidated is in the dining collection and the living suites. Our 100,000㎡ showroom in Lecong is where most buyers finalise the shipping mix that decides which term is really cheaper for them.

WhatsApp +86 188 2788 2512 with your port, volume and delivery window, and we will confirm what the ex-works, FOB and delivered structures look like before you commit.