Import from Thailand: Incoterms 2020 Guide for Buyers
Every Thai commercial invoice ends with a three-letter code — FOB Laem Chabang, CIF Los Angeles, DDP Rotterdam. Those codes decide who pays for freight, who owns the risk if the container falls off the ship, and who deals with customs. Get them wrong and you'll pay twice.
The 11 Incoterms 2020 — but only 5 matter for Thailand
For sea/container imports from Thailand, you'll see these five 99% of the time:
| Term | Seller pays until | Risk transfers at | Best for |
|---|---|---|---|
| EXW (Ex Works) | Factory gate | Factory gate | Advanced buyers with own forwarder |
| FOB (Free on Board) | Loaded onto vessel at Laem Chabang | On board vessel | Most experienced importers |
| CIF (Cost, Insurance, Freight) | Destination port + insurance | On board vessel (yes, before freight ends) | First-time importers |
| DAP (Delivered at Place) | Your warehouse (unloaded not incl.) | Your warehouse | Small-parcel-mentality buyers |
| DDP (Delivered Duty Paid) | Your warehouse + all duties | Your warehouse | Amazon FBA, hands-off buyers |
The FOB trap most buyers miss
FOB means the Thai seller's responsibility ends when the container crosses the ship's rail at Laem Chabang. What that hides:
- Thai origin charges (THC, doc fees, seal, VGM) — usually on the seller's side but sometimes billed to you as "local charges" at destination
- Inland trucking from factory to port — is included in FOB
- Export declaration and Thai customs — included in FOB
If your quote says FCA Bangkok instead of FOB Laem Chabang, you're paying for that inland leg yourself. Watch for this bait-and-switch.
Why CIF is a trap for first-timers
CIF looks convenient — the Thai seller organizes freight and insurance. But:
- The insurance is minimum coverage (ICC C) — covers only total loss, not partial damage
- You still pay all destination charges, and Thai forwarders love to inflate them
- Risk transfers at Thai port, not at destination — so if the vessel sinks, you claim on the seller's minimum policy, not yours
For anything over USD 20k, arrange your own freight and buy ICC A coverage separately.
DDP: convenient but hides the cost
DDP means the seller delivers duty-paid to your door. Sounds perfect. Problems:
- Duty and VAT are baked into the unit price — you can't see the real numbers
- Import records show the seller/nominee as importer of record — you lose duty-drawback rights
- Undervaluation risk: some Thai DDP nominees under-declare to keep duties low, exposing you to customs audit liability
- No proper commercial invoice for your books
Only accept DDP from a reputable trading partner who names you as importer of record and shows the real duty on the invoice.
The right term for each buyer type
- Amazon FBA / DTC seller → DDP with a trusted partner, or FOB + your own DDP-capable forwarder
- Established importer with broker → FOB Laem Chabang, hands down
- Ultra-cost-conscious with own forwarder → EXW Bangkok factory
- First shipment, small volume → CIF is acceptable, but budget for surprise destination fees
Frequently Asked Questions
What's the difference between FOB and FCA in 2026?
FOB applies only to sea/inland waterway and risk transfers when goods are loaded on the vessel. FCA applies to any mode and risk transfers when goods are handed to the carrier — usually at a Bangkok CFS or container yard, not at Laem Chabang. FCA is technically the "correct" term for container shipping under Incoterms 2020, but FOB persists by tradition.
Does CIF include destination customs clearance?
No. CIF ends when goods arrive at destination port. Destination handling, customs clearance, duties, VAT, and inland delivery are all on you.
Who pays for marine insurance under FOB?
The buyer. Under FOB the risk transfers to you the moment the container is loaded in Thailand — buy your own ICC A policy before the vessel sails, not after.
Can I switch Incoterms mid-order?
Only by written amendment to the sales contract, signed by both parties, before the goods ship. Renegotiating after B/L issuance almost never works and creates dispute exposure.