Almost every purchase order that crosses a Vietnamese port is written on one of two terms. The choice looks administrative. It is not — it decides who controls the freight, who absorbs the surprises, and where the margin sits.

What each term actually transfers

Under FOB (Free On Board), the seller delivers the goods on board the vessel at the named Vietnamese port and clears them for export. From that moment the risk, the ocean freight, the insurance and the destination charges are yours.

Under CIF (Cost, Insurance and Freight), the seller also pays the ocean freight and arranges minimum cover to the destination port. The risk still passes on board at the Vietnamese port, exactly as it does under FOB. Convenient — but the freight is bought by someone whose incentive is to book cheaply, not to book well.

Why buyers usually prefer FOB

  • You choose the carrier. Transit time, sailing frequency and reliability become your decision instead of your supplier’s.
  • You see the real rate. On CIF the freight is folded into the unit price. It is rarely the rate the supplier actually paid.
  • Destination charges stay predictable. The most common CIF complaint is a destination handling fee the buyer never agreed to, invoiced by an agent the buyer never chose.
  • Delays reach you first. Your forwarder tells you a container has been rolled. Under CIF you often learn it from a missed delivery date.

When CIF is the better answer

CIF earns its place when the volume is small, when you have no forwarding relationship in the origin country, or when your supplier genuinely has better contracted rates than you do. For a first shipment of two pallets, the simplicity is worth the premium.

The terms to be careful with

EXW puts export clearance on a foreign buyer who often cannot legally perform it in Vietnam — in practice the supplier does it anyway, informally. DDP makes the seller the importer of record, which requires a registered entity or a partner acting as one in the destination country. Both are workable, but only with the arrangement agreed in writing before the order is placed.

If you are unsure which term to write into a contract, send us the route and the volume — we will price the same shipment both ways so you can compare like for like.