Quick answer
- EXW: lowest invoice price, but you handle everything from the factory door. Best for experienced importers with their own forwarder in China.
- FOB: the supplier gets the goods onto the ship; you pay the main freight. The most common term for sea freight from China.
- DDP: one price delivered to your door, duties included. Simplest for small brands and first orders.
On this page
The shipping term on your invoice decides who pays for freight, who handles customs and who carries the risk if something goes wrong on the way. Pick the wrong one and a “cheap” unit price can turn expensive by the time the goods reach you.
What does EXW (Ex Works) mean?
Under EXW, the supplier only makes the goods available at their own premises. You, or your forwarder, arrange the pickup, export clearance in China, international freight, insurance, import clearance and duties. The price looks lowest, but every cost after the factory door is yours.
What does FOB (Free On Board) mean?
With FOB, the supplier delivers the goods to the named port in China, clears them for export and loads them onto the vessel. From that moment the risk and the main freight cost are yours. FOB is meant for sea freight, and it lets you choose your own forwarder for the rest of the journey.
What does DDP (Delivered Duty Paid) mean?
DDP means the seller delivers the goods to your address, cleared for import, with duties and taxes paid. You get one price for everything. It costs more on paper, but there are no surprise fees at your end.
EXW vs FOB vs CIF vs DDP: side by side
| Who handles… | EXW | FOB | CIF | DDP |
|---|---|---|---|---|
| Export clearance (China) | You | Supplier | Supplier | Supplier |
| Main freight | You | You | Supplier | Supplier |
| Insurance | You (optional) | You (optional) | Supplier (minimum cover) | Supplier |
| Import duties & taxes | You | You | You | Supplier |
| Risk passes to you | At the factory | Once loaded on the ship | Once loaded on the ship | At your door |
| Best for | Experienced importers | Regular sea shipments | Buyers who want freight bundled | New brands, small orders |
Which shipping term is right for you?
Frequently asked questions
Is FOB or DDP cheaper?
The FOB price is lower on the invoice, but you pay freight, duties and fees on top. Compare the full landed cost, not the unit price.
Can I use FOB for air freight?
FOB is designed for sea and inland waterway transport. For air or container shipments, FCA is the term made for it, though many suppliers still say “FOB” informally.
Who pays for damage under DDP?
Under DDP the seller carries the risk until the goods reach your named address.
