Incoterms 2020 Explained for China Importers

Incoterms 2020 define who pays for shipping, insurance, and customs when you import from China. Choosing the wrong term can cost thousands in unexpected fees — or leave you responsible for cargo you cannot yet access.

Why Incoterms Matter for China Imports

Every Alibaba, 1688, or factory contract references an Incoterm — even if the supplier just writes "FOB Shenzhen." That three-letter code determines whether you or the seller pays for ocean freight, export clearance, import duties, and last-mile delivery.

Before signing any purchase order, confirm the Incoterm matches your logistics capability. First-time importers almost always benefit from DDP (Delivered Duty Paid) through a forwarder like GSC.

Most Common Incoterms from China

• EXW (Ex Works) — You collect goods at the factory and arrange everything. Lowest supplier price, highest logistics burden.
• FOB (Free on Board) — Supplier delivers to port and clears export; you pay ocean freight and everything after.
• CIF (Cost, Insurance & Freight) — Supplier pays freight to US port, but you still pay import duties, customs, and delivery.
• DAP (Delivered at Place) — Delivered to your address, but duties unpaid — you pay customs separately.
• DDP (Delivered Duty Paid) — All-inclusive door to door including duties and taxes. See our FOB vs CIF vs DDP comparison.

Which Incoterm Should US Importers Choose?

If you have a US customs broker, import bond, and logistics team — FOB gives you control over carrier selection and freight rates. If you want simplicity and predictable costs, DDP is the clear winner.

GSC specializes in DDP from Guangzhou to anywhere in the USA and Australia — any product, FCL or LCL, sea or air. One quote covers pickup, freight, duties, and delivery.