For a custom Mahjong order from China, the correct choice depends on shipment mode, the delivery point, each party's import and export capabilities, the buyer's freight experience, and the need for cost visibility. The term should always include a precise named place or port and the rules edition, for example:
FCA [named place], Incoterms 2020
FOB [named port of shipment], Incoterms 2020
DAP [named destination], Incoterms 2020
This guide focuses on commercial planning. The governing sales contract, logistics agreements, customs law, and current official ICC Incoterms rules should be reviewed for the actual transaction.
Quick Comparison
| Term | Delivery/risk point in simplified terms | Main carriage arranged by | Import clearance and duty | Transport mode |
|---|---|---|---|---|
| EXW | Goods placed at buyer's disposal at named place, normally not loaded | Buyer | Buyer | Any mode |
| FOB | Goods placed on board buyer-nominated vessel at named shipment port | Buyer | Buyer | Sea/inland waterway only |
| CIF | Goods placed on board vessel at shipment port; seller pays carriage and required insurance to named destination port | Seller | Buyer | Sea/inland waterway only |
| DDP | Goods available at named destination, import-cleared and ready for unloading | Seller | Seller | Any mode |
This table is only an orientation. Cost and risk do not always transfer at the same place. CIF is the most common source of that misunderstanding: the seller pays freight to the destination port, but risk transfers when the goods are delivered on board at the shipment port under the ICC rule.
What Incoterms Do and Do Not Define
Incoterms rules help allocate:
- Where delivery occurs
- When risk transfers
- Which party arranges carriage
- Which party handles export and import formalities
- Which party pays specified transport-related costs
- Whether the seller has an insurance obligation under the chosen rule
They do not replace the full purchase contract. The parties still need terms for:
- Product specification and accepted sample
- Tile count and artwork revision
- Quality standards and inspection
- Price and currency
- Deposit and balance payment
- Transfer of title or ownership
- Delay, cancellation, and force majeure
- Intellectual property
- Warranty, claims, and remedies
- Governing law and dispute resolution
Writing “FOB” on a quotation does not solve any of those issues.
EXW: Maximum Buyer Control, More Origin Responsibility
Under EXW, the seller delivers by placing the goods at the buyer's disposal at the named location, such as the factory or a warehouse. The seller is not required under the rule to load the collecting vehicle or clear the goods for export.
For a custom Mahjong buyer, an EXW quote may include:
- Finished sets packed at the factory
- Commercial packing documents supplied by the seller
- Pickup availability at the named factory or warehouse
The buyer may need to arrange and pay for:
- Loading, depending on the agreement
- Pickup and domestic transport in China
- Export handling and clearance
- Origin terminal or warehouse charges
- International transport
- Insurance
- Destination clearance, duty, and fees
- Final delivery
EXW advantages
- Buyer controls the forwarder and route from origin
- Origin and international charges can be consolidated through one logistics provider
- Suitable when the buyer or its forwarder has reliable China export capability
EXW risks and questions
EXW can create practical export-clearance complications because the foreign buyer may not be positioned to perform formalities in the export country. The ICC explanation of EXW makes clear that the seller has no rule-level obligation to clear the goods for export.
Before accepting EXW, ask:
- Who will load the truck, and who bears risk during loading?
- Can the buyer's forwarder complete export clearance correctly?
- Which export documents will the factory provide?
- Is pickup appointment, waiting time, or warehouse handling extra?
- What exact factory gate or warehouse address is the named place?
For many export transactions, FCA can be a more practical starting point because it can assign export clearance to the seller while defining delivery to the carrier at a named place.
FOB: Familiar for Ocean Shipments, Often Misapplied
FOB means the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. The seller clears the goods for export where applicable. Risk transfers when the goods are on board.
The seller normally handles costs through export clearance and on-board delivery at the named shipment port. The buyer arranges the main ocean carriage, destination clearance, duties, and onward delivery.
FOB advantages
- Buyer controls the ocean carrier or forwarder
- Supplier manages factory-to-port export work
- Origin scope is generally broader than EXW
- Freight and destination costs can be compared independently from product cost
FOB limitations
ICC states that FOB is for sea or inland waterway transport where delivery is intended to occur on board a vessel. It also says FOB is not appropriate when goods are handed to a carrier before loading on board, such as at a container terminal; in that situation, the parties should consider FCA. See the official ICC rules for sea and inland waterway transport.
Custom Mahjong sets often travel as containerized cargo. Operationally, the factory or forwarder may hand a consolidated shipment over at a terminal before it is placed on the vessel. Buyers should not choose FOB only because it is familiar. Confirm the actual handover chain with the forwarder and select a rule that matches it.
Questions to ask on an FOB quote
- What is the named port of shipment?
- Does the price include pickup, export declaration, origin handling, and delivery on board?
- Who books the vessel and provides shipping instructions?
- What happens if buyer-nominated transport misses the agreed loading window?
- Are consolidation, documentation, or terminal fees excluded?
- Would FCA at a named terminal better match the actual handover?
CIF: Seller Pays Freight and Insurance, Buyer Still Carries Earlier Risk
CIF means the seller delivers the goods on board the vessel, pays the cost and freight to the named port of destination, and obtains the insurance cover required by the rule. The buyer handles import clearance, duty, destination charges not allocated to the seller, and onward delivery.
The critical distinction is:
- Cost: Seller pays carriage to the named destination port.
- Risk: Risk transfers when the goods are on board at the shipment port.
The arrival of the freight invoice at a destination port does not mean the seller retained transit risk to that port.
CIF advantages
- Seller arranges the main ocean carriage
- Buyer receives a price including freight to a named destination port
- Required insurance arrangement is included under the rule
CIF limitations and insurance review
CIF is for sea and inland waterway transport only. For multimodal container traffic, ICC points to CIP as an alternative where appropriate.
The ICC explanation also notes that CIF under Incoterms 2020 requires limited insurance cover consistent with the specified rule standard, not automatically the broadest available protection. The buyer should review the insured value, covered risks, exclusions, claims procedure, policy currency, and deductible. If additional coverage is needed, agree it explicitly.
Destination-charge risk
A CIF price can appear convenient while leaving important destination costs open. Ask for an itemized list of:
- Ocean freight included
- Destination terminal handling
- Deconsolidation
- Documentation or release
- Port storage
- Customs clearance
- Duty and government fees
- Final-mile delivery
“CIF Los Angeles” does not mean delivered to a Los Angeles warehouse.
DDP: Seller Handles the Broadest Delivery Scope
Under DDP, the seller delivers the goods at the named destination, cleared for import, on the arriving means of transport and ready for unloading. The seller bears the rule-defined risks and costs to that point, including export and import clearance and applicable duties and taxes.
DDP can be attractive to a buyer that wants one delivered price and limited logistics coordination. It can also hide important compliance and cost questions if the seller's US import structure is unclear.
DDP advantages
- Seller arranges transport to the named destination
- Seller bears the rule's import-clearance and duty obligations
- Buyer receives a broad delivered-cost boundary
- Useful when the seller has a legitimate, documented import solution
DDP cautions
ICC describes DDP as the rule imposing the maximum obligation on the seller and warns that practical realities may prevent a seller from undertaking import clearance. A foreign seller may face importer-of-record, bond, tax, licensing, agency, or local legal issues.
Before accepting DDP, ask:
- Who is the importer of record?
- Which licensed customs broker files the entry?
- Whose name and importer number appear on the entry?
- Which HTS classification and customs value will be declared?
- Are all applicable duties, tariffs, and government fees included?
- Will the buyer receive entry and duty documentation?
- Is the named destination a port, warehouse, curbside address, or fulfillment center?
- Is unloading, appointment, inside delivery, or pallet handling included?
- Who handles customs questions, examinations, or post-entry corrections?
- Does the seller have the legal and operational ability to perform import clearance?
Avoid arrangements that depend on undervaluation, incorrect product descriptions, borrowed importer identities, or undocumented routing. A delivered price does not transfer the buyer's reputational and supply-chain risk out of sight.
DDP versus DAP
When the seller can manage transport to the destination but cannot or should not act for import clearance, DAP may be cleaner. Under DAP, the seller handles transport and risk to the named destination, while the buyer handles import clearance and duties. This can preserve delivery convenience while keeping US customs entry under the buyer's control.
Which Term Fits Different Custom Mahjong Scenarios?
| Buyer situation | Term to evaluate | Reason to evaluate it |
|---|---|---|
| Buyer has a strong China-origin forwarder | EXW or FCA | Buyer can control pickup and transport; FCA may simplify export clearance |
| Buyer controls ocean freight from a named port | FCA or FOB | Choice depends on the actual carrier handover and vessel delivery point |
| Seller arranges ocean freight to destination port | CIF or CIP | CIF is maritime; CIP may fit multimodal handover better |
| Buyer wants seller-managed transport but controls US entry | DAP | Buyer remains responsible for import clearance and duty |
| Buyer wants a documented all-in delivered arrangement | DDP | Use only after verifying the seller's import capability and exact named point |
This is not a universal recommendation. Transport mode, cargo handover, customs structure, and negotiating leverage can change the best choice.
Quote Comparison: Move Every Offer to the Same Boundary
Assume three suppliers quote the same custom 160-tile product:
- Supplier A: EXW factory
- Supplier B: FOB named China port
- Supplier C: DDP US warehouse
Their displayed unit prices include different cost layers. Convert each quote to the same final receiving point:
Comparable delivered cost =
quoted product and logistics scope
+ excluded origin charges
+ excluded main transport
+ excluded insurance
+ excluded import duty and fees
+ excluded broker and destination charges
+ excluded final delivery
Then add buyer-side receiving, inspection, and saleable-yield costs. The result becomes part of the US landed-cost calculation, not merely a shipping comparison.
Put the Exact Term in the Purchase Order
Use this structure:
[Three-letter rule] [precise named place/port and point], Incoterms 2020
Examples of precision include a full factory address for EXW, a named carrier terminal for FCA, a named shipment port for FOB, or a complete warehouse address and delivery point for DDP.
Also attach:
- Product specification revision
- Packaging and carton specification
- Planned ready date
- Booking and document responsibilities
- Required shipping documents
- Insurance requirements beyond the selected rule
- Customs-data and entry-document access
- Notice and claims procedure
- Delay and storage cost allocation
Do not rely on messaging-app conversations to modify the trade term after the purchase order. Record every agreed change.
Common Incoterm Mistakes in Mahjong Sourcing
- Comparing EXW and DDP unit prices as if they cover the same scope
- Writing FOB without a named port
- Using FOB for air courier shipments
- Assuming CIF risk transfers at the destination port
- Assuming CIF includes customs clearance and final delivery
- Accepting DDP without identifying the importer of record
- Ignoring unloading and warehouse appointment requirements
- Assuming any Incoterm defines payment, ownership, product quality, or warranty
- Using an old term from a template without stating the rules edition
- Failing to match the term to the actual carrier handover
Frequently Asked Questions
Is FOB always better than EXW when buying from China?
No. FOB includes a broader seller-side origin scope, but it is a maritime rule and may not match container-terminal handover. EXW gives the buyer more origin responsibility. FCA may be more suitable in many carrier-handover situations.
Does CIF include US customs duty?
No. Under CIF, the buyer is responsible for import clearance and related duties. The seller pays freight and required insurance to the named destination port, while risk transfers at shipment under the rule.
Does DDP mean the buyer pays nothing after delivery?
Not necessarily. The exact named point and contract determine the commercial scope. Unloading, receiving, inspection, storage, fulfillment, sales tax, or services beyond the delivery point may remain outside the seller's price.
Can FOB be used for air freight or express courier?
FOB is designated for sea or inland waterway transport. For air or multimodal transport, evaluate an any-mode rule such as FCA, CPT, CIP, DAP, or DDP based on the intended allocation.
Which Incoterm is cheapest?
No term is inherently cheapest. It changes which party contracts and pays for each stage. Compare total cost, operational capability, risk visibility, and customs control at the same final delivery point.
Confirm the Delivery Scope Before Quotation
Send Lucky Mahjong your order quantity, destination, preferred transport mode, and the point where you want the factory's responsibility to end. We can state the factory-side packing and delivery scope clearly so your forwarder or broker can price the remaining stages.
Request a Wholesale Quote or email [email protected] with the subject line Incoterm and Shipping Scope.