Import from Thailand: Incoterms 2020 Explained 2026
Incoterms decide who pays and who is liable at every step of the shipment. For Thai imports, 90% of buyers use FOB, CIF, or DAP — but picking the wrong one can add 8–15% to your landed cost.
The 5 Incoterms you actually need
EXW — Ex Works (factory gate)
Buyer arranges everything from the factory door. Cheapest on paper, most complex in practice. Only sensible with a Thai freight forwarder on retainer.
FOB — Free On Board (most common)
Seller delivers cargo to Laem Chabang / Bangkok port and clears Thai export customs. Risk transfers at ship's rail. Buyer books ocean freight and destination customs. Best default for 80% of importers.
CIF — Cost, Insurance & Freight
Seller pays freight and minimum insurance to destination port. Convenient, but seller marks up freight 10–25%. Insurance is minimum (ICC-C) — not enough for most cargo.
DAP — Delivered at Place
Seller delivers to buyer's named destination, unloaded. Buyer handles import duty and customs. Good for buyers with weak destination logistics.
DDP — Delivered Duty Paid
Seller handles everything including destination duty. Highest risk of hidden markups and misclassified HS codes. Only with fully trusted supplier + your own broker verification.
Cost comparison — 1x 40ft HC, LCB → Los Angeles
| Incoterm | Factory | Freight | Insurance | Duty | Total |
|---|---|---|---|---|---|
| FOB LCB | $28,000 | $3,100 | 80 | $2,240 | $33,520 |
| CIF LA | $31,400 | incl. | incl. (min) | $2,240 | $33,640 |
| DAP LA | $31,900 | incl. | incl. | $2,240 | $34,140 |
| DDP LA | $34,600 | incl. | incl. | incl. | $34,600 |
All roads reach roughly the same landed cost — the difference is who controls the process and where markups hide.
Risk transfer at a glance
EXW → risk on buyer from factory door
FCA → risk on buyer once loaded on nominated truck
FOB → risk on buyer once on vessel at Thai port
CIF → risk on buyer once on vessel (seller pays freight)
DAP → risk on buyer at destination, unloaded
DDP → risk on buyer at destination, duty paid
Related
FAQ
Q: Why is FOB the default? A: It gives buyers control over the biggest cost (ocean freight) while letting Thai sellers handle what they know best (export customs at LCB).
Q: Is CIF insurance enough? A: No. It's Institute Cargo Clause C — covers only major perils. Buy your own ICC-A "all risks" policy for 0.3–0.5% of cargo value.
Q: Is DDP legal into the US? A: Yes, but the seller must have a US Importer of Record. Most Thai factories don't, so they proxy via a broker — creating liability for you as the actual consignee.
Q: Which Incoterm for Amazon FBA? A: DDP to FBA via a trusted 3PL, or FOB + your own US freight forwarder handling PO routing to Amazon receive appointments.