FOB vs CIF when buying from Vietnam: which Incoterm should you use?
What FOB, CIF, FCA and EXW mean in practice for container shipments from Hai Phong and Ho Chi Minh City, and how to choose the right one.
5 min read Updated
The short answer
If you have a freight forwarder and ship regularly, buying FOB (or FCA) gives you more control over cost and timing. If you are new to importing and ship rarely, CIF is simpler, but you have less visibility and may pay more at destination.
What each term means
Under Incoterms 2020:
- EXW: you collect from the factory and handle export clearance. Rarely practical for foreign buyers in Vietnam.
- FCA: the seller delivers to your carrier, for example at a container yard, cleared for export. Recommended by the ICC for containers.
- FOB: the seller delivers the goods on board the vessel at the named port, such as FOB Hai Phong. Risk passes to you at that point.
- CIF: the seller also pays ocean freight and minimum insurance to your port, but risk still passes when the goods are loaded in Vietnam.
Why FOB is common for Vietnam
Most Vietnamese exporters quote FOB Hai Phong or FOB Ho Chi Minh City. It lets you compare suppliers on the same basis, choose your own forwarder and consolidate shipments. Agree in writing who pays origin charges such as terminal handling and bill of lading fees.
Watch out with CIF
CIF insurance only has to meet minimum cover, and the seller chooses the shipping line. Destination charges are paid by you and can be higher than expected. If you buy CIF, check the insurance terms and ask your forwarder to quote destination charges in advance.
