Most Thai export quotes default to FOB Bangkok or FOB Laem Chabang. It is familiar and it is usually defensible — but "usually" is doing a lot of work.
01The default: FOB, and its limits
FOB works when the cargo is genuinely loaded on board as a unit — breakbulk, bulk, project cargo. For containers, FOB is a poor fit. A container is handed over at a terminal or CFS days before it is on board, yet under FOB the seller carries risk until it crosses the ship's rail. That gap — sitting in a terminal stack, insured by nobody clearly — is the seller's exposure.
For containerised cargo, FCA at the terminal or CFS is the correct term. Risk passes on handover, which is when the seller actually loses control.
The reason FOB persists is banking: letters of credit traditionally demand an onboard bill of lading. Incoterms 2020 fixed this — under FCA the parties can agree the buyer instructs the carrier to issue an onboard B/L to the seller. Use it.
02When to offer CIF or CIP
Offer a C-term when the buyer wants a landed-cost comparison and you want to control the routing.
- CIF for sea freight commodity trades where the buyer expects it.
- CIP for air and multimodal — and remember CIP now requires all-risks cover, which costs more than CIF's minimum cover. Price it in.
The advantage of a C-term is control: you choose the carrier, you protect your service standard, and you keep the relationship with the line. The disadvantage is that you are quoting a freight rate months ahead in a market that moves. Add a validity date and a bunker/currency adjustment clause.
03When DAP makes sense
DAP is a good fit when:
- The buyer is a small importer without a forwarder relationship.
- You want to own the delivery experience end to end.
- The destination is somewhere your agent network is strong.
The buyer still clears import and pays duty, so you avoid the foreign-tax problem.
04Why we push back on DDP
Under DDP the seller pays destination import duty and VAT/GST. Three problems:
- You often cannot legally be the importer of record. Many countries require a resident entity. Without one you are relying on a workaround that can unravel at audit.
- You cannot reclaim the destination VAT. A local importer usually can. That VAT becomes pure cost in your price.
- You are quoting a tax you cannot verify. Duty rates change, classifications get challenged, and the bill lands after you have already been paid.
05The quoting checklist
Before any quote leaves the office:
- Incoterm, named place, and the edition year — all three.
- Mode confirmed (FOB and CIF are sea-only; using them for air is a common and expensive error).
- Validity date on the rate.
- What is excluded — destination charges, duty, inspection, demurrage.
- Insurance: who arranges it, at what cover level.
An Incoterm without a named place is not a quote. It is an argument waiting to happen.