When shipping from China, are you better off being in control or having everything done for you? That’s the core question importers must answer.
Choosing the right Incoterm—especially between FOB (Free On Board) and DDP (Delivered Duty Paid)—affects your shipping cost, customs process, risk, and delivery timeline. Whether you’re a first-time importer or a seasoned buyer, understanding these terms is essential to avoid costly mistakes.
Let’s explore what each term really means, how they impact your transport chain, and which one suits your business.
1️⃣ What Is FOB?
FOB (Free On Board) is an Incoterm where the seller is responsible for getting your goods to the origin port and loading them onto the vessel. After that, you take over.
Feature:
You handle shipping from the port onward—including freight, insurance, import clearance, and final delivery.
Advantage:
FOB gives you full control over freight booking, routing, and timing.
📌 Detail:
- Ideal for experienced buyers or companies with their own freight agents
- Reduces supplier markups on logistics
- Requires active involvement in transportation and compliance
2️⃣ What Is DDP?
Delivered Duty Paid means the seller handles everything—export clearance, freight, import duty, and final delivery to your address.
Feature:
A full-service option from factory to door.
Advantage:
Minimizes buyer involvement and reduces surprises.
📌 Detail:
- Preferred by new importers or eCommerce sellers
- Helps avoid customs delays and paperwork
- Costs more but simplifies the process
3️⃣ Key Responsibilities Compared
Here’s how these two shipping terms compare when it comes to logistics responsibilities:
| Task | FOB | DDP |
|---|---|---|
| Inland Transport (China) | ❌ | ✅ |
| Export Customs | ✅ | ✅ |
| Main Freight (Sea/Air/Rail) | ✅ | ✅ |
| Import Clearance & Duty | ✅ | ✅ |
| Final Delivery | ✅ | ✅ |
4️⃣ How Responsibilities Vary by Shipping Mode
🚢 Sea Freight
FOB: You select the carrier, arrange customs clearance, and handle final delivery.
DDP: The seller manages the full shipment, including destination taxes and inland trucking.
📌Sea shipments are complex—FOB gives you more control, DDP offers more ease.
✈️ Air Freight
FOB: You book the cargo and manage time-sensitive customs clearance.
DDP: The seller pre-clears goods and ensures smooth handover at your facility.
📌Air freight penalties for delays can be costly—DDP avoids those risks.
🚄 Rail Freight
FOB: You coordinate with rail operators and delivery agents in Europe.
DDP: The seller handles international rail, border clearance, and EU last-mile delivery.
📌Rail involves multiple customs zones—DDP is often more efficient.
5️⃣ Cost Differences
While FOB often appears cheaper upfront, importers must budget for:
- Port handling fees
- Freight costs
- Duty and tax payments
- Final mile delivery
DDP, while more expensive on the surface, includes all logistics and paperwork—offering peace of mind.
6️⃣ Example: Electronics to the US
A buyer imports 2 CBM of electronics from Shenzhen.
- FOB quote: $2,000, but $500 in extra handling fees arise later.
- DDP offer: $2,600 door-to-door, with no surprise costs.
For predictable timelines, DDP wins. For flexibility, FOB might make more sense.
7️⃣ When to Use Each Term
Use FOB If:
- You have logistics experience
- You ship full containers
- You want cost control
Use DDP If:
- You’re new to importing
- You want to avoid customs issues
- You sell via Amazon or need door-to-door
8.Final Thoughts
Choosing between these Incoterms depends on how much involvement you want in the shipping process.
- Prefer control? Go with FOB.
- Want simplicity? Choose DDP.
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FAQ:
Q1.Can I use DDP if I don’t have an import license?
Yes. Since the seller is the official importer of record, you usually don’t need an import license with DDP.
Q2.Why do some suppliers avoid offering DDP?
DDP requires sellers to handle foreign customs and taxes, which can be complex. Not all suppliers have the experience or logistics partners to do it.
Q3.How long does shipping take under DDP?
30–40 days by sea, 8–12 by rail, 5–10 by air, depending on destination.
Q4.Does choosing one term affect transit time?
Yes. DDP may be slightly faster due to streamlined customs handling.
Q5.How does FOB or DDP affect Amazon FBA shipments?
DDP is often preferred for Amazon, as it ensures delivery to the FBA warehouse with all customs cleared. FOB requires you to manage customs and coordinate FBA delivery.