Incoterms for Straw Bag Buyers: EXW, FOB and DDP With Real Numbers

Two quotes for the same 500 bags can differ by thirty percent and both be honest. The
difference is usually not the product. It is where each quote stops paying.

Incoterms are the three-letter codes that define exactly that: who pays for what, and
where risk transfers from seller to buyer. Getting them wrong is how a buyer ends up with
an unexpected invoice from a freight forwarder, or with goods sitting at a port because
nobody arranged clearance.

The four you will actually meet

EXW — Ex Works

The lowest number you will ever see, and the most misleading. The price covers the goods,
packed, available at our premises. Everything after that is yours: collection, export
clearance, freight, import clearance, duty, delivery.

EXW suits buyers with an established forwarder who want full control of the route.
It badly suits first-time
importers, who often read the low number as a bargain and then discover the rest of the
stack.

FOB — Free On Board

We deliver the goods, export-cleared, loaded onto the vessel at the named port. Risk
passes when they are on board. You take it from there — sea freight, insurance, import
clearance, duty and inland delivery.

FOB is the most common term in wholesale and a fair default. It puts each side in
charge of the leg it knows best.

One technical note: FOB is defined for sea and inland waterway transport. For air
freight the correct equivalent is FCA. Plenty of people say “FOB airport” — it is not a
real term, and if it appears in a contract it will be ambiguous when something goes wrong.

CIF — Cost, Insurance and Freight

We pay freight to the destination port and buy insurance. Risk still transfers at
loading, which surprises people — under CIF you carry the risk from the moment the goods
are on the vessel even though we paid the freight. You handle import clearance, duty and
inland delivery.

DDP — Delivered Duty Paid

The maximum obligation on us. We deliver to your door with everything paid, including
import duty and clearance. You unload.

DDP is the simplest for the buyer and the most expensive line item, because we are
pricing risk we cannot fully control in your country. We quote it where a buyer genuinely
wants a single number, but be aware you are usually paying a margin for that simplicity.

There is also a real constraint: DDP requires the seller to handle import clearance in
the buyer’s country, which in some jurisdictions requires a local entity or a fiscal
representative. Where we cannot do that cleanly, we will say so rather than quote a term
we cannot perform.

Why your freight bill is not about weight

Here is the thing that catches out almost every new buyer of straw bags.

Carriers charge on the greater of actual weight or volumetric weight.
Volumetric weight is calculated as length × width × height in centimetres, divided by
5,000 for air freight and express.

A straw bag weighs very little and takes up a lot of space. So you are essentially
always paying volumetric.

Worked example. 25 medium totes, nested and boxed. Actual weight is
roughly 9 kg. The carton measures about 80 × 50 × 50 cm.

80 × 50 × 50 = 200,000 cm³
200,000 ÷ 5,000 = 40 kg volumetric

You pay on 40 kg, not 9 kg. Then a fuel surcharge is applied on top — currently running
around 40 percent with the major express carriers.

This is why compressing the pack matters so much on this product, and why we nest bags
wherever the shape allows. It is also why sea freight becomes dramatically better value
as soon as your volume justifies it.

Sea freight thresholds

Useful reference points for planning:

• A 20ft container holds roughly 12,000 bags depending on size and nesting.
• A 40ft container holds roughly 24,000.
• Below about a third of a container, LCL (less than container load) is usually the
  right call — you share space and pay by cubic metre.

The crossover point where sea beats air is lower than most buyers expect on this
category, precisely because of the volumetric problem. If your order fills more than two
or three cubic metres and you are not in a rush, price the sea option.

Which term to ask for

First order, no forwarder, want simplicity: ask for DDP and accept you
are paying for convenience. You will learn the process by watching it happen.

You have a forwarder: FOB. Standard, fair, and your forwarder will
almost always beat a seller-arranged rate.

You have a forwarder with an agent in Morocco: EXW. Lowest total cost
if you genuinely have the capability.

Air freight of any kind: FCA, not FOB.

What to insist a quote shows

Ask every supplier for the same breakdown, or you cannot compare them:

• Goods value
• The Incoterm and the named place
• Estimated freight, stated with the volumetric assumption used
• Estimated duty, or a clear statement of zero where a trade agreement applies
• Clearance and handling
• Inland delivery to the final address

If a supplier will not itemise, that is information too.

US buyers should read the duty line alongside our
US–Morocco
FTA guide, because for most of our products it is genuinely zero and that changes the
comparison materially.

Send us a specification, quantity and delivery address through the
contact page and we will quote all four terms side by side so
you can see exactly what each leg costs.