What is the Difference Between FOB and EXW at Canton Fair?

By Yaurapulse

Published 2026-10-21 Updated 2026-10-21Pricing, MOQ & Negotiation

When you ask a supplier for a price at the Canton Fair, you will usually hear one of two terms: FOB or EXW. Most suppliers quote FOB by default, but some will offer EXW if you ask. The difference between these two terms is not just a few dollars — it changes who handles the shipping, who bears the risk, and how much work you have to do.

If you do not understand the difference, you might choose the wrong term and end up paying more than expected, or get stuck with shipping problems you did not sign up for. This guide will break down exactly what FOB and EXW mean, how they compare on cost and responsibility, and which one you should choose at the Canton Fair.

What do FOB and EXW actually mean?

FOB stands for Free on Board. Under FOB terms, the supplier is responsible for delivering the goods onto the ship at the named Chinese port. The price includes the product cost plus the cost of trucking the goods from the factory to the port and clearing them through Chinese export customs. Once the goods are loaded onto the vessel, all responsibility and risk transfer to you.

EXW stands for Ex Works. Under EXW terms, the supplier's responsibility ends at their factory door. The price includes only the product cost. You are responsible for everything from that point on: picking up the goods at the factory, trucking them to the port, clearing Chinese export customs, ocean freight, insurance, import clearance, and final delivery.

In the simplest terms: FOB includes China-side logistics; EXW does not.

What costs are included in FOB vs EXW?

This is the most important difference. Let me break down exactly what you are paying for under each term.

FOB price includes:

Product cost (materials, labor, factory overhead, supplier profit)
Domestic trucking from factory to the Chinese port
China export customs declaration fee
Local port charges before loading (THC, documentation, etc.)

FOB price does NOT include:

Ocean or air freight from China to your destination
Cargo insurance
Import customs clearance in your country
Import duties and taxes
Destination port charges
Inland transportation from your port to your warehouse

EXW price includes:

Product cost only

EXW price does NOT include:

Domestic trucking from factory to the Chinese port
China export customs declaration fee
Local port charges
Ocean or air freight
Cargo insurance
Import customs clearance
Import duties and taxes
Destination port charges
Inland transportation

As you can see, EXW is the bare minimum price. Everything else is your responsibility and your cost.

How much can FOB and EXW differ in price?

The gap between FOB and EXW is the cost of China-side logistics. This varies depending on the factory location, the port, the shipment size, and the current market rates.

A real example from industry data: For a 40-foot high-cube container of disposable paper cups:

EXW price: $2,400
FOB price: $3,400
Difference: $1,000

That $1,000 covers domestic trucking from the factory to the port plus export customs declaration and local port charges.

In general, the China-side costs under FOB include:

Trucking fee: depends on distance from factory to port, typically $200–$800
Customs declaration fee: approximately $21–$30 per declaration form
Terminal handling charge (THC): varies by port, can be several hundred dollars
Documentation fees: bill of lading fee, certificate of origin, etc.

For a full container, the FOB–EXW gap is usually $800–$1,500. For less-than-container (LCL) shipments, the local charges can be disproportionately high — sometimes exceeding the cost of a full container's local fees because the fixed costs are spread over a smaller volume.

Who is responsible for what under FOB vs EXW?

The responsibility split is where FOB and EXW really differ. Here is a clear comparison:

Under FOB:

Product manufacturing: Supplier
Trucking to Chinese port: Supplier
China export customs clearance: Supplier
Loading onto the ship: Supplier
Ocean/air freight: Buyer
Cargo insurance: Buyer
Import customs clearance: Buyer
Import duties & taxes: Buyer
Inland delivery to warehouse: Buyer

Under EXW:

Product manufacturing: Supplier
Trucking to Chinese port: Buyer
China export customs clearance: Buyer
Loading onto the ship: Buyer's forwarder
Ocean/air freight: Buyer
Cargo insurance: Buyer
Import customs clearance: Buyer
Import duties & taxes: Buyer
Inland delivery to warehouse: Buyer

Under FOB, the supplier handles the first mile (factory to port). Under EXW, you handle everything from the factory door onward.

WARNING: Under EXW, if your freight forwarder makes a mistake with Chinese export customs or domestic trucking, the problem and the cost are entirely yours. You cannot blame the supplier.

What are the risks of FOB vs EXW?

Both terms have risks, but they are different kinds of risks.

FOB risks for the buyer:

Risk 1: The bill of lading goes to the supplier first. Under FOB, the freight forwarder issues the bill of lading (BL) to the supplier, who is legally the cargo owner. The forwarder can only release the BL to you with the supplier's written authorization. The supplier will only grant this after receiving full payment. This is why FOB usually requires "balance before shipment" — you pay 100% before you get the document that lets you pick up the goods.

Risk 2: Demurrage if you abandon the cargo. If the goods arrive at your destination port and you cannot clear customs or decide you do not want them, demurrage charges (port storage) start piling up. Under FOB, these are your responsibility. If you walk away, the charges can become a legal liability.

Risk 3: Forwarder mistakes are yours. You book the container space through your forwarder. If they miss the vessel, route the cargo wrong, or make a paperwork error, you bear the cost.

EXW risks for the buyer:

Risk 1: Everything is your problem. From the moment the goods leave the factory, every risk is yours. If the truck breaks down, if customs holds the shipment, if the port worker damages the cargo — it is all on you.

Risk 2: You need a China-capable forwarder. Not every freight forwarder can handle domestic trucking and export customs in China. If your forwarder is inexperienced in China, you will face delays, extra fees, and paperwork headaches.

Risk 3: Tax refund complications. From the supplier's side, EXW can create issues with China's export tax refund. Under Chinese tax rules, export revenue is calculated on an FOB basis, which includes port charges. If the supplier exports under EXW, they may face a mismatch between their declared export value and the actual foreign exchange received, which can complicate their tax refund. This is why many Chinese suppliers prefer FOB — it is cleaner for their tax filings.

How does the bill of lading work under FOB vs EXW?

The bill of lading (BL) is the document that proves ownership of the goods. Who controls the BL determines who has leverage in the transaction.

Under FOB: The freight forwarder issues the BL to the supplier (the cargo owner). The supplier controls the BL until you pay in full. Only then do they authorize the forwarder to release the BL to you. This protects the supplier — they will not release the goods until they are paid.

Under EXW: The BL is usually issued directly to you (the buyer) by default, because you are arranging all the shipping. The supplier has less control over the cargo once it leaves their factory. However, if the supplier needs to claim export tax refund or if you have negotiated payment terms, the BL may go to the supplier instead.

Key takeaway: Under FOB, the supplier holds the cards (literally — the BL). Under EXW, you have more control over the shipping documents.

When should you choose FOB at the Canton Fair?

Choose FOB if:

You have a reliable freight forwarder who handles ocean freight but not China domestic logistics. Under FOB, your forwarder only needs to book the container space and handle the ocean voyage. The supplier takes care of getting the goods to the port.

You want a simpler, more predictable China-side process. The supplier handles domestic trucking and export customs, which are the parts of the process that are hardest for a foreign buyer to manage from abroad.

You are working with a new supplier and want them to have skin in the game. Under FOB, the supplier is responsible for getting the goods safely to the port and onto the ship. If something goes wrong on the China side, it is their problem to fix.

You want to compare prices easily. Most suppliers quote FOB by default, so comparing FOB prices across different suppliers is straightforward.

When should you choose EXW at the Canton Fair?

Choose EXW if:

Your freight forwarder operates in China and can handle domestic trucking and export customs. If your forwarder has a China office or partners with a local logistics company, EXW can save you money because you avoid the supplier's markup on local charges.

You want the lowest possible product cost. EXW gives you the bare product price, making it easier to see the supplier's actual margin and negotiate from there.

You are shipping from multiple factories. If you are consolidating goods from several suppliers into one container, EXW lets your forwarder pick up from each factory and combine the shipment, which can be more efficient than having each supplier deliver to the port separately.

You have experience with Chinese export customs. EXW requires you (or your forwarder) to handle export declaration, which involves knowing the correct HS codes, preparing the right documents, and dealing with Chinese customs.

WARNING: Do not choose EXW just because the price looks lower. The China-side costs you save on paper must be weighed against the complexity and risk of handling everything yourself. If your forwarder cannot handle China domestic logistics competently, EXW will cost you more in the long run.

How to ask for FOB and EXW prices at the Canton Fair

When talking to suppliers, be specific about what you want:

To get an FOB price: "Can you give me the FOB price to Shenzhen port?" Always name the port — FOB Guangzhou, FOB Shanghai, and FOB Ningbo can have very different local costs.

To get an EXW price: "What is your EXW factory price?" This tells the supplier you will handle all shipping.

To compare both: "Can you quote me both FOB Shenzhen and EXW prices?" This lets you calculate whether your forwarder can handle the China side for less than the supplier's FOB–EXW gap.

Always ask what the FOB price includes. Some suppliers quote "FOB" but exclude terminal handling charges (THC) or documentation fees. Get a written breakdown: "Does the FOB price include THC, customs declaration, and documentation fees?"

A practical comparison: FOB vs EXW total cost

Let me walk through a realistic example to show how the total cost compares.

Scenario: You are buying 5,000 units of a product at $5.00 per unit (FOB Shenzhen). The EXW price is $4.70 per unit.

Option A — FOB Shenzhen:

Product cost: $5.00 x 5,000 = $25,000
China-side costs: included in FOB
Your additional costs: ocean freight + insurance + import clearance + duties + delivery
Your total China-side cost risk: $0 (supplier handles it)

Option B — EXW factory:

Product cost: $4.70 x 5,000 = $23,500
Your China-side costs (paid to your forwarder):
Trucking factory to port: $500
Export customs declaration: $30
THC and port charges: $400
Documentation: $150
Total China-side: $1,080
Your product + China-side: $23,500 + $1,080 = $24,580

Savings with EXW: $420 (compared to FOB's $25,000)

In this example, EXW saves you $420 — but only if your forwarder can handle the China side for $1,080 or less. If your forwarder charges more, or if there are unexpected delays or fees, EXW could end up costing more.

The breakeven point: EXW saves you money only if your forwarder's China-side costs are less than the FOB–EXW price gap. In this case, the gap is $1,500 ($25,000 – $23,500), so your forwarder needs to deliver for under $1,500.

What should you watch out for?

Hidden local charges under FOB. Some suppliers quote a low FOB price and then add "local charges" separately: THC, documentation, customs declaration, container loading. Always ask for an all-inclusive FOB price.

EXW tax refund issues for the supplier. Some Chinese suppliers may push back on EXW because it complicates their export tax refund. If a supplier is reluctant to do EXW, this is likely the reason. They may prefer FOB to keep their tax paperwork clean.

Nominated forwarder fees under FOB. If you nominate your own forwarder under FOB, the supplier may charge a "nominated forwarder fee" or loading fee. Ask about this upfront.

Port distance matters. A factory in Dongguan quoting FOB Shenzhen will have lower trucking costs than the same factory quoting FOB Shanghai. Always check which port the FOB price is for.

LCL shipments favor FOB. For less-than-container shipments, EXW local charges can be disproportionately high. If you are shipping LCL, FOB is usually the better choice because the supplier's volume gives them better local rates.

Bottom Line

FOB and EXW are the two most common trade terms at the Canton Fair. The difference comes down to one question: who handles the China-side logistics?

FOB means the supplier handles trucking to the port and export customs. The price is higher, but the process is simpler and the supplier takes responsibility for the China side.

EXW means you handle everything from the factory door. The price is lower, but you need a China-capable forwarder and you take on all the China-side risk.

Here is how to decide:

Choose FOB if you have a forwarder for ocean freight but not China domestic logistics, or if you want a simpler process.
Choose EXW if your forwarder handles China domestic logistics and can beat the supplier's FOB–EXW gap.
Always compare both prices and calculate the breakeven point.
Always ask which port and what is included in the FOB price.
For LCL shipments, prefer FOB — local charges under EXW can be disproportionately high.

The cheapest quote is not always the cheapest total cost. Calculate the full landed cost for both FOB and EXW, and choose the option that gives you the best total price with the least risk.