What each term covers
EXW (Ex Works): the supplier makes the goods available at their premises. Loading, export clearance, inland transport, freight, insurance, import clearance, duty and delivery are all yours. It is the cheapest-looking quote and the most work.
FOB (Free On Board): the supplier handles inland transport and export clearance and loads onto the vessel at the named port. From that point the freight, destination customs, duty and final delivery are yours. FOB is the usual middle ground for buyers who already have a forwarder.
DDP (Delivered Duty Paid): the seller delivers to your named address with import duties and taxes paid. It is the maximum obligation on the seller under Incoterms.
Where the surprise costs hide
On EXW, the costs that catch people out are export clearance in China — which a foreign buyer usually cannot do in their own name — plus origin terminal handling and documentation fees.
On FOB, the sea freight is the visible part. Destination terminal handling, delivery order fees, storage and demurrage if clearance is slow, and duty and taxes on the landed value are the invisible part.
On DDP, the cost is whatever the seller has decided to build in — which is why a DDP number is only as good as the breakdown behind it.
The duty base matters more than the Incoterm
Import duty is assessed on the declared value. If you buy through a trader or an agent who marks up the unit price, duty is charged on the marked-up figure, so the margin costs you twice — once as margin and once as duty on that margin.
That is why a factory-direct invoice with a separately stated service fee can land cheaper than a bundled quote even when the headline percentage looks similar.
When a DDP quote is a trap
A DDP price is only meaningful if the party quoting it is willing to be the importer of record and carries the customs risk. Some quotes marked DDP are in practice delivered-at-place with duty invoiced to you later, or rely on undervaluing the declaration — which leaves the exposure with you.
Ask three questions before accepting one: who is named as importer of record, what duty rate and HS code the number assumes, and what happens to demurrage if clearance is delayed.
What we quote
We quote DDP and act as importer of record, so customs runs in our name and the delivered number is the number. We are also happy to handle freight only if you already have suppliers and just want the lane run.
Related questions
[01]Is DDP cheaper than FOB?
Not inherently — DDP is FOB plus freight, customs, duty and delivery, priced by someone else. It is cheaper in practice when the party quoting it consolidates shipments and clears in its own name, and more expensive when it is a trader bundling a margin into a single opaque number.
[02]Who is the importer of record on a DDP shipment?
Under DDP it should be the seller or their nominated agent, not you. This matters because the importer of record carries the customs liability. Get it in writing, because some DDP quotes quietly leave you as the importer.
[03]Can a Chinese supplier quote DDP to my country?
Many will quote it, but most cannot clear customs in your country in their own name and are relying on a forwarder to do it. That is fine when the arrangement is explicit and the duty basis is stated, and a problem when it is not.
Read next
- How do you tell a Chinese factory from a trading company?The checks that actually separate a manufacturer from a reseller — business licence scope, address, export documents — and the badges that prove nothing.
- What does a China sourcing agent cost?The three fee structures you will be quoted, which one hides the number, and why the structure matters more to your landed cost than the percentage.