What Are the Common Quotation Terms When You Import Custom Metal Parts from Vietnam?

When I first started importing custom metal parts from Vietnam, the wide range of shipping terms made negotiations feel like a legal maze.

The most common quotation terms are EXW (Ex Works) ¹, FOB (Free On Board) ², and CIF (Cost, Insurance & Freight) ³. Each one determines how costs, risks, and logistics responsibilities are shared between you and the supplier according to Incoterms 2020 ⁴.

Keep reading to understand which term best protects your interests and how each option affects your cost, control, and risk level.

What does FOB price include vs exclude?

When I first heard "FOB Haiphong," I thought the supplier would handle everything until my goods reached the port—turns out, there’s more to the story.

FOB price includes transport from the supplier’s factory to the port, export customs clearance, and loading onto the ship. It excludes sea freight, insurance, and everything after the goods are on board.

Dive deeper: Understanding the true FOB breakdown

In the context of Vietnam, FOB is the most balanced and commonly used term. It defines responsibilities and cost-sharing between buyer and seller with clarity. However, the term is often misunderstood or loosely interpreted by inexperienced factories.

What FOB includes from the seller’s side:

• Manufacturing and packaging of goods
• Local transportation from the factory to the port
• Export customs clearance and documentation
• Terminal handling charges (THC) at the Vietnamese port
• Loading the goods onto the vessel

What FOB does not include:

• Ocean freight from Vietnam to destination country
• Marine insurance (optional for buyer)
• Destination port unloading charges
• Customs clearance and duties at the destination country
• Inland delivery to the final location

Here’s a visual breakdown:

FOB offers a clear risk transfer point: the moment goods are loaded onto the ship at the Vietnamese port. But make sure your supplier understands local logistics—especially in Vietnam, where seaport infrastructure ⁵ isn’t always as efficient as in China.

How is EXW different from FOB in Vietnam?

I once accepted an EXW quote because the price looked better—big mistake. I ended up chasing a freight forwarder in Hanoi ⁶ just to get the goods out of the country.

EXW means the supplier hands over the goods at their factory, and you take care of everything else—including moving the goods, export clearance, and booking sea freight. FOB, on the other hand, shifts those responsibilities to the supplier until the goods are on board.

Dive deeper: Why EXW in Vietnam carries hidden risks

EXW is the most supplier-friendly term. From a Vietnamese factory’s point of view, it limits their responsibility to just making the goods and letting the buyer collect them. Many small or less experienced factories in Vietnam quote EXW because they lack export service capabilities ⁷.

The buyer’s workload under EXW:

• Arrange local trucking from the supplier’s factory
• Hire a local freight forwarder in Vietnam
• Handle Vietnamese export customs clearance
• Pay terminal handling fees and arrange container stuffing
• Book ocean freight and marine insurance
• Manage the entire supply chain from the factory to your warehouse

In contrast, FOB lifts much of this burden:

In Vietnam, even under FOB, buyers often still need to coordinate with freight forwarders to send a container to the factory. This is because many Vietnamese forwarders don’t offer warehouse consolidation services. Instead, they prefer container pickup from the factory—called "trucking to site." Failing to understand this nuance can lead to delays or costly last-minute changes.

So while FOB is easier than EXW, don’t assume it’s hands-off—make sure you clarify the handover point and container logistics in advance.

When should you choose CIF vs FOB?

Back in my early days, I was tempted by CIF offers because they sounded “all-inclusive.” But later I realized the real control—and flexibility—was with FOB.

Choose CIF if you want the supplier to manage the ocean freight and insurance. Choose FOB if you want more control over your freight forwarder, costs, and routing.

Dive deeper: Control vs convenience

CIF (Cost, Insurance & Freight) can be appealing for less experienced importers. It simplifies international shipping because the supplier arranges everything up to the destination port.

Advantages of CIF:

• Supplier books the freight and insurance
• Simplifies logistics for small importers
• One quote covers most shipping-related costs
• Less coordination on your part

Disadvantages of CIF:

• You have no control over the freight provider or transit time
• Insurance is usually the lowest grade (Clause C)
• Risk still transfers at origin port once goods are loaded
• Hidden costs may be embedded in freight pricing

If you’re importing high-value or fragile parts, relying on basic insurance isn’t enough. You’ll need to negotiate either higher-grade insurance with the supplier or arrange your own marine cargo insurance ⁸.

Also, some Vietnamese suppliers use CIF as a sales tool—targeting new buyers who may not notice that risk still transfers once goods are loaded. So be cautious: CIF doesn’t mean zero risk.

What risks do you assume at EXW vs FOB?

I learned the hard way that EXW doesn’t just shift responsibility—it transfers every ounce of risk the moment the goods leave the supplier’s floor.

Under EXW, you assume all transport and risk from the factory onward. Under FOB, the supplier takes responsibility until the goods are loaded onto the vessel.

Dive deeper: Visualizing your risk map

Let’s compare the two terms based on risk exposure and responsibility:

With EXW, any damage during loading at the factory, road accidents en route to port, or delays in export clearance all fall on your shoulders.

FOB shifts this risk to the supplier—at least until the goods are safely loaded onto the ship. So if you’re managing multiple SKUs or tight timelines, the added protection of FOB is usually worth it.

In Vietnam, where port access can be tricky and many factories lack export experience, this risk difference is even more important. When in doubt, choose FOB and define container handover terms clearly.

Conclusion

FOB is the most balanced term for Vietnam imports—EXW gives you full control (and full risk), while CIF offers simplicity but less flexibility. Choose what matches your logistics strength.

Footnotes

1. ICC official definition of EXW in Incoterms 2020. ↩︎
2. Detailed explanation of FOB responsibilities under Incoterms. ↩︎
3. Understanding CIF and its insurance implications. ↩︎
4. Overview of Incoterms 2020 standards from ICC. ↩︎
5. Overview of Vietnam’s port infrastructure and logistics network. ↩︎
6. Definition and role of freight forwarders in international trade. ↩︎
7. Export procedures and documentation requirements in Vietnam. ↩︎
8. Guide to marine cargo insurance coverage for importers. ↩︎
9. Explanation of import customs valuation methods by WTO. ↩︎ ↩︎
10. Vietnam Customs Department’s official English portal. ↩︎ ↩︎