Picture three quotes for the same ten-set stable order, each with a different headline number, and only one of those numbers is comparable. The gap is not the price of galvanised steel and HDPE panels. It is the trade term written beside the figure — in practice a fob vs cif vs ddp choice, since FOB, CIF and DDP pricing each bundle a different set of costs into the headline, and the buyer who compares them without stripping them back first is negotiating with a spreadsheet that lies.
Most importers learn this once, expensively: the cheapest-looking quote hands you the most unpaid invoices. Freight, insurance, duty and handling get paid under every term; the only question is whose number they sit inside.
Key Takeaways
- FOB, CIF and DDP are Incoterms rules published by the International Chamber of Commerce, stating who pays each leg and where risk passes.
- Under CIF the supplier pays ocean freight and minimum marine insurance, but risk still transfers at the port of loading — damage at sea is your claim.
- DDP is the only one of the three where the supplier also carries duty, taxes and final delivery, and the term with most room for hidden margin.
- A real comparison is one sheet with the same six cost rows per quote, the blanks priced by your own forwarder and broker.
- On a stable order the freight row is set by packing: flat pack geometry decides the cube, and the cube decides what CIF and DDP cost.
What sits inside each price
Read a quote as a stack of six legs, not a number. Steel is made, panels are packed, a truck reaches a Chinese port, a vessel crosses the ocean, the goods are cleared and taxed, and another truck puts them on a property. Three letters say where the supplier’s bill stops.
| Cost leg | FOB | CIF | DDP |
|---|---|---|---|
| Goods, packing, inland haul to load port | Seller | Seller | Seller |
| Export clearance | Seller | Seller | Seller |
| Ocean freight | Buyer | Seller | Seller |
| Marine insurance | Buyer, optional | Seller, minimum cover | Seller |
| Unloading at destination | Buyer | Buyer | Buyer unless agreed |
| Duty, GST/VAT, inland delivery | Buyer | Buyer | Seller |
One row deserves a second read. CIF obliges the seller to insure only to a minimum floor, and it does not insure your interest in the cargo. Price your own cover against the invoice value before you score that quote.
Where risk and cost change hands
Cost and risk move at different points, and mixing them up is the commonest quoting error here. Under FOB and CIF in the Incoterms 2020 revision, risk passes when the goods are on board at the named port of loading. The seller books the vessel and pays for the voyage under CIF, yet a container that arrives with crushed panel bundles is your claim to make.
DDP moves both lines to the far end: cost and risk travel to your gate and the seller acts as importer of record, although unloading at the destination is typically still the buyer’s task unless the quote says otherwise. That is simpler for a first consignment, and it is also where a supplier has most room to bury margin, because you never see the freight, handling or clearance invoices underneath the single figure. Being importer of record also means whoever holds that role carries the customs record, the duty debt and the biosecurity declarations — worth weighing before you hand that position to an overseas entity.
Building the side-by-side sheet
Build the comparison as one sheet with six cost rows, not as three headline numbers. Fill the supplier’s term into the rows it covers, then price the blanks with quotes from your own forwarder and customs broker. Only then are the columns comparable.
- Goods and packing: check whether timber bracing and dunnage are included, and whether they are ISPM 15 treated.
- Ocean freight: quote it on total cubic metres and bundle count for your exact configuration, not on stall count.
- Insurance: price what the CIF minimum floor does not indemnify.
- Port and handling: confirm whether terminal handling and documentation sit inside the freight quote or outside it.
- Duty and GST/VAT: ask your broker to state the customs value base in writing — goods only, or goods plus freight and insurance.
- Final inland leg: site access, unloading gear, and whether delivery is curbside or to the paddock.
That duty row is where FOB numbers look better than they are. A landed-cost build belongs underneath it; this sheet only normalises the term. Duty and GST are normally assessed on a customs value that includes international transport and insurance, so a low goods price with buyer-paid freight does not shrink the tax bill in the way buyers hope. Our portable horse stable manufacturing pages lean on flat pack format for this reason: the packing sets the cube, the cube sets the freight line, and under CIF or DDP that line sits inside the supplier’s quote rather than yours. Where you want the rate-by-rate build instead, our FOB vs total landed cost walkthrough covers that ground; this sheet stops at making the terms comparable.
What to confirm before you pick a term
Trade terms on this product line are not published as a standard price list, so treat the term as a negotiated line in your quote rather than a menu option. Put five questions in one email and require the answers on the same document as the number.
- Term, edition and named place: “FOB Shanghai” and “FOB” are not the same sentence.
- Cube and bundle count: total cubic metres, number of bundles and gross weight, so two suppliers are quoted on identical packing.
- Insurance reality: under CIF, who is the insured party and at what cover level.
- Documents: invoice, packing list and bill of lading in the names you need for clearance, agreed before the vessel sails.
- Order context: this line runs to a 10-set minimum order with capacity around 20 sets a week, so a freight plan built on part-loads needs arguing, not assuming.
Suppliers who answer all five in writing are usually the ones whose numbers survive a landed-cost comparison. Those who say “we will discuss after the deposit” have told you which row will move later.
When cheaper terms cost more
FOB keeps your options open. You choose the forwarder, you see the freight invoice, and you can consolidate a stable consignment with goods from other suppliers. It also means you own the schedule problem in a tight freight month, because a cheap goods price has never protected anybody from a vessel with no space.
CIF earns its place when your forwarder has thin service from a smaller loading port, or when you want one fewer conversation. Take your own insurance and inland quotes before comparing it to an FOB number, and keep the supplier’s freight invoice visible — that figure may form part of your customs value.
DDP suits a buyer testing a market: one landed number, no clearance admin, no surprise demurrage. It is a weak fit for repeat orders, where you lose the freight data you need to negotiate the next shipment. Read our walkthrough of customs broker versus self-clearing for stable consignments before deciding that never touching clearance is a comfort rather than a cost.
Frequently Asked Questions
Is FOB always the cheapest option for importing horse stables?
No. FOB only looks cheap because freight, insurance and arrival charges sit outside it. Price those legs yourself and a well-negotiated CIF quote often lands lower.
Does CIF mean the supplier is liable if my stables are damaged at sea?
No. Risk transfers on loading at the port of shipment. The seller pays freight and minimum insurance, but damage in transit is your claim, so most buyers add cargo cover.
What is the difference between DDP and DAP?
Both deliver to a named place at the seller’s cost and risk. Under DAP you clear the goods and pay duty; under DDP the seller does, which is why its number includes customs admin.
Can I change trade terms between the first order and repeat orders?
Yes. A DDP trial order reveals the landed number; once you have that landed figure, tendering the freight separately on later orders is often the cheaper way to run the third shipment.
Conclusion
Trade terms decide who carries freight, insurance and clearance, and who sees the invoices behind them. One comparison sheet with the same six rows turns three incomparable quotes into a single decision, and exposes the term that only looks cheap.
Ask your supplier to state the Incoterms rule, named place, bundle count and total cube in writing. Then price the empty rows with your own forwarder and broker before you commit to either number.
