FOB means the supplier pays until goods are loaded at the origin port; CIF adds sea freight and insurance to your port; DDP means the seller delivers to your door with duty and GST paid.
What Incoterms are
Incoterms are standard trade terms published by the International Chamber of Commerce. They set out who pays for each stage of a shipment and where the risk passes from seller to buyer. The current version is Incoterms 2020.
The four terms you will see most
| Term | Seller pays until | You arrange |
|---|---|---|
| EXW (Ex Works) | Goods are ready at the factory | Everything: pickup, export clearance, freight, import |
| FOB (Free On Board) | Goods are loaded on the ship at the origin port | Sea freight, insurance, import clearance, delivery |
| CIF (Cost, Insurance and Freight) | Goods arrive at the Australian port, with freight and basic insurance paid | Import clearance, duty, GST, delivery |
| DDP (Delivered Duty Paid) | Goods are delivered to your door with duty and GST paid | Unloading |
Which one should you choose?
- FOB suits importers with their own freight forwarder and customs broker. It gives the most control over freight cost.
- CIF is simpler, but under CIF the risk passes to you once the goods are loaded at origin, and the seller chooses the insurance level, which may be the minimum.
- DDP is the easiest for a first order: one price, delivered. Check how the seller handles GST so you can claim it back.
- EXW is rarely a good idea for first-time importers from these countries, as you become responsible for export clearance abroad.
How customs value is worked out in Australia
Australia calculates customs duty on the FOB value, even if you buy on CIF or DDP terms. GST is then charged on the customs value plus duty plus international freight and insurance. See our landed cost guide for a worked example.
How Terry House quotes
We quote FOB, CIF or DDP in Australian dollars, so you can compare like with like. Most first-time clients choose DDP and move to FOB once they have a forwarder and broker they like. Request a quote.
General information only, current at 25 September 2026. It is not legal, tax or customs advice. Tariff rates depend on the exact classification and rules of origin, so confirm your obligations with a licensed customs broker or the Australian Border Force before you import.