FOB vs CIF for Bearing Orders

What FOB, CIF and CFR mean for a bearing order, when LCL beats FCL, and which costs sit on each side of the term.

The trade term on a bearing quote decides two things: who pays for each leg of the journey, and at what point the risk of loss or damage passes from seller to buyer. For bearings shipped from China by sea, the terms you see most are FOB, CFR and CIF, with EXW and FCA used less often. This page explains each in plain terms under Incoterms 2020, shows which costs sit on which side, and covers the LCL vs FCL choice for a product as heavy as bearings.

The common trade terms for bearing orders

TermSeller deliversSeller paysRisk passes to buyerBuyer arranges
EXW (named place)At the seller’s premises, not loadedPacking onlyAt the seller’s premisesCollection, export clearance, freight, insurance, import
FCA (named place)To the buyer’s carrier, export clearedExport clearance, delivery to carrierWhen handed to the carrierMain freight, insurance, import
FOB (port of loading)On board the vessel in ChinaExport clearance, inland transport, loading port chargesOn board at the port of loadingOcean freight, insurance, import
CFR (port of destination)On board the vessel in ChinaAs FOB plus ocean freightOn board at the port of loadingInsurance, destination charges, import
CIF (port of destination)On board the vessel in ChinaAs CFR plus basic cargo insuranceOn board at the port of loadingDestination charges, import

Two points surprise many buyers:

  1. CIF and CFR move the cost, not the risk. The seller pays the freight to your port, but the risk is yours from the moment the bearings are on board in China. If a container is damaged at sea, you claim on the insurance.
  2. CIF insurance is basic cover. Incoterms 2020 requires the seller to insure CIF cargo for at least 110% of the contract value on Institute Cargo Clauses (C), which covers major casualties but not all damage. If you need wider cover, such as Clauses (A), ask for it or insure the goods yourself.

FOB, CFR and CIF are intended for sea and inland waterway transport. For containers handed over at an inland depot, or for air freight, FCA and CPT/CIP are the matching terms.

Who pays for what: the cost split

CostEXWFOBCFRCIF
Export packingSellerSellerSellerSeller
Loading at factoryBuyerSellerSellerSeller
Inland transport to port in ChinaBuyerSellerSellerSeller
Export customs clearanceBuyerSellerSellerSeller
Port charges at originBuyerSellerSellerSeller
Ocean freightBuyerBuyerSellerSeller
Cargo insuranceBuyerBuyerBuyerSeller (basic cover)
Destination port charges and unloadingBuyerBuyerBuyer, unless included in the freight contractBuyer, unless included in the freight contract
Import duty, taxes and clearanceBuyerBuyerBuyerBuyer
Delivery to your warehouseBuyerBuyerBuyerBuyer

When you compare a FOB quote with a CIF quote, add the freight and insurance you would pay yourself to the FOB price, then compare. Ask your forwarder for destination charges in both cases; they can be significant and are not part of a CIF price.

FOB or CIF: which to choose for bearings

Choose FOB if:

  • You already work with a forwarder who handles your other imports from China.
  • You want to consolidate bearings with goods from other suppliers into one container.
  • You want to control the shipping line and the timing.

Choose CIF or CFR if:

  • You import rarely and have no forwarder in China.
  • You want a single price that covers the sea leg.
  • The order is small and the seller’s forwarder can book LCL space more easily.

Name the port in the term, for example FOB Qingdao or CIF Santos, so the quote is unambiguous. Confirm the port of loading with the supplier when you ask for the quote.

LCL or FCL for a bearing shipment

LCL (less than container load) is for shipments that fill only part of a container. Your cartons are consolidated with other cargo at a warehouse in China and separated again at the destination. LCL is charged per freight ton, which is the greater of one cubic metre or one metric ton, plus warehouse and handling fees at both ends.

FCL (full container load) gives you a whole container at a fixed rate, whatever you put in it, up to the weight limit.

Bearings change the usual LCL/FCL arithmetic because they are dense. A pallet of bearings often weighs more than one tonne for each cubic metre it takes up. So:

  • An LCL bearing shipment is usually charged by weight, not volume.
  • A container of bearings reaches its weight limit long before it is full. A 20-foot container is often the practical choice for heavy cargo like bearings; a 40-foot container carries more volume but not proportionally more weight.
  • The point where FCL becomes cheaper than LCL depends on the weight of the shipment more than its volume.

Before asking for freight rates, estimate the gross weight. The bearing weight chart gives approximate weights per bearing. Add the weight of the packing for a first estimate, then use the packing list figures once the order is packed.

What to put in your inquiry

  1. The trade term and the named port, for example FOB Tianjin or CIF Callao.
  2. Whether you have a forwarder in China. If you do, their contact details.
  3. For CIF, whether basic insurance cover is enough or you need wider cover.
  4. Any document your customs office needs, such as a certificate of origin in a particular form.

Shipments from FULI come with a commercial invoice, packing list and CCPIT certificate of origin, plus an FTA Form COO where the destination country qualifies, which can lower import duty in some countries. Our guide to bearing packaging and export marking covers box printing, shipping marks and what to specify. To compare a FOB price with a CIF price line by line, see reading a bearing price list.

Send your model list with the trade term and port to sales@fuli-bearings.com or through the contact page. The quotation request template has a line for both. For the whole process, see the bearing buying guide.

Backed by 20+ years of bearing export experience in Linqing, Shandong. FULI ships to 50+ countries & regions.

FAQ

What is the difference between FOB and CIF for a bearing order?

Under FOB the seller delivers the bearings on board the vessel at the port of loading in China, and you arrange and pay for sea freight and insurance. Under CIF the seller also books and pays for the freight and basic cargo insurance to your port. In both cases the risk passes to you when the goods are on board in China.

Which is better for bearings, FOB or CIF?

FOB if you have a forwarder you trust and want control over freight cost and timing. CIF if you do not have a forwarder and want one price to your port. Check the destination charges either way, because CIF does not cover unloading, port fees or customs clearance at your end.

Should I ship bearings LCL or FCL?

LCL for small orders that fill only part of a container; FCL once the shipment is large enough that a full container costs less than the LCL charges. Because bearings are heavy, a container often reaches its weight limit before it is full.

Which port do bearings ship from in China?

Name the port of loading in the trade term, for example FOB Qingdao or FOB Tianjin, and confirm it with the supplier when you ask for the quote.

How is LCL freight for bearings charged?

LCL is charged per freight ton, which is usually the greater of one cubic metre or one metric ton. Bearings are dense, so a bearing shipment is often charged by weight rather than volume.

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