Incoterms decide three things on every invoice: who pays for freight and insurance, where customs responsibility sits, and the exact moment risk transfers from the factory floor to your side of the transaction. Incoterms 2020 lists eleven codes, but for a China-to-Central-Asia pipe shipment only about half a dozen realistically matter. Choosing wrong is not just a pricing question — it can strand a container of 20 × 2.0 mm underfloor coil at a border crossing you assumed your supplier would handle.
The terms, briefly
- EXW (Ex Works) — you collect at the factory door; the seller does the least possible. Chinese export clearance, inland haulage, main freight and insurance are all yours. Lowest headline price, heaviest buyer burden.
- FCA (Free Carrier) — the seller clears Chinese export customs and hands the goods to your carrier at a named place, for example Ningbo or Shanghai. In most real-world cases it is the smarter replacement for EXW, because the supplier, not you, handles local export bureaucracy.
- FOB (Free On Board) — the classic sea term: the seller pays to get goods on board at the loading port (Ningbo / Shanghai); risk transfers once goods are on board; you control the main carriage. For rail or truck departures FOB is technically the wrong tool — FCA or CPT fit those modes better.
- CPT (Carriage Paid To) — the seller pays the main carriage to a named destination (Almaty, Tashkent), but risk transfers to you at handover to the first carrier, not on arrival. This is the workhorse of China–Europe rail blocks.
- CIF (Cost, Insurance and Freight) — sea-only: CFR plus the seller buying insurance to the destination port (for example Poti, or a Baltic port with onward rail). Risk still transfers at the loading port, so "C" and "I" do not mean the seller carries the risk all the way.
- DDP (Delivered Duty Paid) — door-to-door with the seller handling import customs and duties in your country. The easiest headline number, but usually the priciest, and you lose control of the customs declaration and your own import records.
Why landlocked Central Asia changes the default
Kazakhstan, Uzbekistan, Kyrgyzstan and most EAEU markets have no seaport. The realistic lanes are rail block trains (for example Xi'an or Hefei to Almaty / Tashkent, or transits via Khorgos / Alashankou) and international trucking. On those lanes, FCA at Ningbo or Shanghai — or FCA at a rail terminal — lets you consolidate cargo and control the main carriage with your own forwarder, while CPT to Almaty or Tashkent hands the supplier the leg where their lane rates beat yours. FOB and CIF were designed for container ships; writing them into a rail contract invites arguments about who paid what. DDP gives you one simple landed number, but you pay a convenience premium and the seller controls the import entry — a real problem if you need clean duty and VAT records for local tenders or state projects.
Comparison at a glance
| Term | Seller pays & carries risk until | Buyer handles | Best when |
|---|---|---|---|
| EXW | Factory floor only | Inland China, export clearance, all freight, insurance | You have your own forwarder collecting in Ningbo |
| FCA | Export clearance + handover at named place (Ningbo / Shanghai) | Main carriage, insurance, import clearance | You want control of the main leg by rail or sea |
| FOB | Goods on board at the loading seaport | Sea freight, insurance and everything after | Genuine sea container; you choose the carrier |
| CPT | Paid main carriage to named destination (Almaty / Tashkent) | Risk after carrier handover, import, on-carriage | Rail / road lanes where the supplier has better rates |
| CIF | Sea freight + insurance to destination port | Risk after the loading port, unloading, import, onward rail | Sea leg to a Black / Baltic port plus your own rail |
| DDP | Named place incl. duties and import formalities | Almost everything except the import entry | Small trial orders; you accept paying for convenience |
Normalise before you compare
A "cheap" FOB quote and a "pricey" CPT Almaty quote are not comparable until the missing legs are added. Build every number up to your warehouse door: landed cost = term price + freight you must add + insurance + customs duty and clearance + inland delivery. Only then do the two suppliers stand side by side honestly. This also exposes the quote that looked great at FOB but collapses once you price your own rail capacity in peak season.