Shipping · Guide 06
EXW, FOB or DDP: understand responsibility before comparing prices
Direct answer
EXW, FOB and DDP describe different divisions of cost, responsibility and risk. They are not transport methods. Compare quotations only after confirming the named place, version of the Incoterm and every included or excluded charge. The named location is essential because it fixes the exact delivery point.
01
EXW: maximum buyer coordination
Under an EXW-style quotation, collection starts at the seller’s premises and the buyer usually coordinates origin transport and export steps. In practice, export formalities and documentation must be checked carefully because the seller may still need to cooperate.
- Name the exact pickup address.
- Confirm loading and export-document responsibilities.
- Budget origin collection and handling.
02
FOB: origin delivery to the port
FOB is used for sea or inland-waterway shipments and names a port of shipment. The seller handles agreed origin responsibilities up to loading on board; the buyer manages the main carriage and destination side. It should not be used loosely for every courier shipment.
- Specify the port, not just “FOB China”.
- Confirm local charges included in the quotation.
- Separate goods value from international freight.
03
DDP: convenient only when compliant
DDP can offer an all-inclusive delivery scope, but the importer-of-record, tax, customs valuation, licences and final-delivery conditions must be legitimate and written. A vague low DDP price can hide compliance, surcharge or documentation risk.
- Identify who legally imports the goods.
- Request duties, taxes and exclusions in writing.
- Confirm delivery address and surcharge conditions.
EXW, FOB and DDP allocate different responsibilities
| Term | Main seller scope | Buyer watchpoint |
|---|---|---|
| EXW | Makes goods available at the named premises | Origin loading, export feasibility and collection costs |
| FOB | Delivers goods on board at the named port of shipment | Main sea carriage, destination charges and import |
| DDP | Delivers to the named destination with import obligations under the rule | Legitimate importer, valuation, tax and written exclusions |
Incoterm-selection process
-
01
Define the complete origin-to-destination route
-
02
Choose the rule and exact named place
-
03
Itemize included and excluded charges
-
04
Identify the legal importer and customs duties
-
05
Write the Incoterms version into the sales order
Incoterm comparison checklist
- 01Named place or port written
- 02Incoterms version confirmed
- 03Origin and destination charges itemized
- 04Importer-of-record identified
- 05Duties, taxes and exceptions documented
Questions people ask
Is DDP always the safest option?
No. It can be convenient when the importer and customs process are legitimate and transparent. An unclear DDP arrangement can create tax, valuation or seizure risk.
Can FOB be used for air freight?
FOB is intended for sea and inland-waterway transport. FCA is generally the more suitable Incoterm framework for containerized or air shipments, depending on the operation.
Detailed answers for the next step
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Continue through the knowledge hub
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Sources and methodology
Incoterms® rules allocate delivery tasks, costs and risks between seller and buyer. They do not determine product ownership, payment terms or every customs-law obligation.
- Incoterms® 2020 rules International Chamber of Commerce
- Mijay Group shipment-quotation workflow Mijay Group · Guangzhou
Turn the guide into an operational project
Mijay Group coordinates sourcing, supplier verification, negotiation, production follow-up, quality control and shipping from China.