FOB · Landed cost math

FOB cost calculator

Add the EXW factory price, inland trucking from factory to port, export clearance, and port charges. The tool returns the FOB price in USD, plus the per-unit FOB price for the commercial invoice. Math is exposed below the result so the buyer can verify line by line.

Last updated 2026-05-08. Math runs in your browser, no data leaves your computer.

General guidance only, not legal or professional engineering advice. Verify against the cited primary sources (IMDG, REACH, ChAFTA, RCEP, Customs Tariff Act, supplier SDS, etc.) before committing to a shipment, declaration, or contract. Sourzi assumes no liability for outcomes based on these calculators.

Each line in the stack is a real cost the seller absorbs before the cargo crosses the rail of the vessel. Itemise rather than estimating a percentage on top of EXW; the percentage method hides the surprise when the forwarder issues the back-end invoice.

The factory price quoted ex-works, in USD, for the agreed quantity. Take it from the supplier PI (Proforma Invoice), not the catalogue. If the PI is in RMB, convert to USD at the day you quote, not the day you ship.

Number of billable units in the shipment. Used only to compute the per-unit FOB price; total FOB does not depend on this number.

Cost of moving the container from the factory gate to the origin port terminal. Get the number from the forwarder. A 40HC Shandong to Qingdao runs 1,800 to 2,500 RMB; Zhejiang to Ningbo 1,200 to 2,000 RMB.

China customs declaration fee from the export clearing agent. Typical chemical-export declaration runs 800 to 1,500 RMB per declaration, plus an inspection fee if the HS code is flagged for inspection.

Terminal Handling Charge at the origin port. Shanghai 40HC THC is around 980 RMB; Ningbo around 880 RMB; Yantian around 1,100 RMB. Ask the forwarder for the current tariff sheet.

Combined documentation fee, bill-of-lading issuance, and the seal. Often bundled into port charges but pull them out so the quote stack is auditable. Typical 250 to 500 RMB combined per shipment.

Anything else the seller absorbs before the rail of the vessel: pre-shipment inspection (SGS or Bureau Veritas), fumigation, dunnage, Q-mark or CIQ inspection. Leave blank if none.

How it works

FOB price out of China is the sum of five line items the seller absorbs before the cargo crosses the rail of the vessel: the factory price ex-works, inland trucking from factory to origin port, export customs clearance, origin port handling, and documentation. Each item has a market range you can compare against. The math is straightforward; the value of the tool is that it surfaces the line items in the order a Chinese forwarder will itemise them, and saves the result as a paper-trail document you can attach to the quote email.

A common mistake on the seller side is to estimate FOB as EXW plus 8 to 12 percent as a lump uplift. The percentage works on average, but on the day the forwarder bills, the seller discovers that the inland trucking moved up because diesel rose, the BL fee is 100 USD that was not in the lump, and the THC at Yantian is 200 RMB above what was estimated. The percentage hides the surprise. Itemising kills it.

A common mistake on the buyer side is to assume FOB is the only cost they will see at origin. It is not. Marine insurance, if the buyer arranges it, sits at the origin booking; if the seller arranges insurance for the buyer (called CIF), it moves to the seller side and the FOB price rises by the premium. ISF filing, AMS for US imports, the BL fee charged by the destination carrier, and any inspection at the load port the buyer pays for, all sit at the buyer side after FOB. The FOB price you quote is the floor of what the cargo costs to land at destination, not the ceiling.

When the buyer asks for a best FOB price, they want a number that holds for at least seven days, that does not pad an arbitrary percentage, and that they can verify against their own forwarder tariff. Itemising at quote time gives them all three.

Worked example

The booking. A US buyer asks for 200 drums of 200 L sodium hydroxide 50 percent solution, FOB Qingdao. The Shandong factory quotes 28.50 USD per drum ex-works for the chemical and 18.00 USD per drum for the steel drum, totalling 46.50 USD per drum, totalling 9,300 USD ex-works for the 200 drums. Inland trucking from the factory in Zibo to Qingdao port for one 20GP container is 2,200 RMB at the day exchange rate of 7.10, equal to 310 USD. Export clearance is 1,000 RMB equal to 141 USD. Origin port handling at Qingdao for a 20GP is 850 RMB plus 350 RMB documentation plus 100 RMB seal, equal to 1,300 RMB or 183 USD. The seller adds 200 USD for SGS pre-shipment inspection. Total: 9,300 plus 310 plus 141 plus 183 plus 200 equals 10,134 USD FOB. Per drum: 50.67 USD. Looks fine on paper.

The failure. The forwarder issues the actual invoice on the day of loading. Inland trucking has gone to 2,500 RMB because diesel is up that week. The BL fee was missed in the original quote, that is another 200 RMB. The export declaration triggered a CIQ inspection because sodium hydroxide is on the GACC inspection list, that is another 600 RMB. New total: 9,300 plus 352 plus 141 plus 183 plus 113 plus 200 plus 85 equals 10,374 USD. The seller is 240 USD short on margin per shipment. Either the seller eats the margin, or the price has to go up. The seller eats it this time but raises the standing-quote line items for the next shipment.

The fix. On the next quote, the seller itemises every line in the stack: EXW, inland (with a quoted range and a fuel-surcharge note), export clearance with a separate inspection-fee placeholder, THC, BL, seal, and pre-shipment inspection. The buyer sees nine line items instead of one. The number is 4 USD higher per drum than the original lump, but the new number holds. No back-end surprise, no margin erosion. The shipment closes at 50.83 per drum FOB Qingdao, the buyer signs the PO, the cargo ships.

Frequently asked

What is FOB and where does the seller liability end?

FOB stands for Free On Board. Under Incoterms 2020, the seller delivers when the cargo is loaded onto the vessel at the named port of shipment, and risk transfers from seller to buyer at that exact moment. The seller covers everything to that point: factory loading, inland trucking, export clearance, and port handling. The buyer covers the ocean freight, the destination charges, and the import clearance.

Why is FOB the most-quoted Incoterm out of China?

FOB is the cleanest cut between seller and buyer responsibilities for sea freight. The Chinese factory or trader sees the cargo to the rail of the vessel; the buyer takes it from there with their own freight forwarder, their own carrier contract, and their own marine insurance policy. Buyers prefer FOB because it lets them control the freight cost, the routing, and the carrier choice. Sellers prefer FOB because their liability is bounded at the origin port.

Should EXW or FOB be quoted to a US buyer who is new to China sourcing?

Quote FOB. EXW means the buyer is responsible for export clearance from China, which a foreign company cannot legally complete itself; the buyer ends up hiring a Chinese forwarder anyway, often pays more, and inherits a paper-trail risk if the export declaration is wrong. FOB keeps the export clearance with the seller, where it belongs.

What is included in port charges on the FOB side?

Origin port charges typically combine the Terminal Handling Charge (THC), documentation, the bill-of-lading fee, the seal fee, and any port-security or wharfage charge the local terminal levies. The line items vary by port; Shanghai, Ningbo, Qingdao, and Yantian each publish their own tariff. Ask the forwarder for a per-container itemised quote, not a lump THC, so you can compare across origin ports honestly.

Why is my quoted FOB different from what the freight forwarder charges?

A freight forwarder operates under FOB Incoterms but bills the seller for whatever line items the seller agreed to absorb. Some forwarders bundle docs and seal into THC; others itemise. If the FOB price you quote is missing the bill-of-lading fee or the seal fee, the forwarder will invoice the seller for those at the back end and the margin you forecast disappears. Itemise the costs at quote time and you avoid the surprise.

Does this calculator handle ChAFTA or RCEP preference?

Not at this stage. This tool returns the FOB price; preferential origin (ChAFTA, RCEP, ACFTA Form E, China-Chile Form F) determines the import duty the buyer pays at destination, which sits outside the FOB scope. For origin determination see /tools/compliance-and-risk/chafta-preference-calculator and /tools/compliance-and-risk/rcep-origin-calculator.

Why use this tool instead of a spreadsheet?

A spreadsheet works fine if you only quote one line at a time. This tool was built to reflect the typical China-export cost stack out of the box, with the named line items in the order a Chinese forwarder will itemise them. The math is exposed for verification and runs in your browser; nothing about your costing leaves your computer.

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