FOB vs CIF vs DDP: Which Should You Choose?

Under FOB, the supplier is responsible for getting goods to the origin port, loaded and export-cleared. From that point, cost and risk pass to you, and you (or your forwarder) arrange ocean freight, insurance, Australian import clearance and delivery.

FOB tends to suit importers who already work with a freight forwarder or customs broker, because it keeps freight and duty as separate, visible line items rather than bundled into the supplier's price, making it easier to compare quotes from different factories on a like-for-like basis.

CIF adds two things on top of FOB: the supplier books and pays for ocean freight to the destination port, and arranges minimum marine insurance. Risk still passes to you when goods are loaded, so if something goes wrong in transit, you're claiming against the insurance the supplier arranged (worth checking the coverage level, since 'minimum cover' under Incoterms rules is often lower than you'd want).

CIF can look convenient on paper, but because the supplier is choosing the carrier and freight rate, you generally have less negotiating leverage on the freight component than if you booked it yourself.

DDP places nearly the full chain, freight, insurance, Australian customs clearance, duty and GST, on the supplier, who delivers to an agreed point in Australia. It is the least administratively demanding option for a buyer new to importing.

The trade-off is visibility and control: you don't see the breakdown of freight versus duty versus markup, and you're trusting the supplier's Australian customs process, which they may be handling through a subcontracted local agent rather than direct experience.

If you want cost transparency and are working with (or want to appoint) your own forwarder and broker, FOB is usually the more workable default. If you'd rather hand off logistics complexity entirely and are comfortable paying for that convenience, DDP can make sense for early or low-volume orders. CIF sits in between and is worth scrutinising on insurance terms before you agree to it.