DDP vs DAP vs FOB: Choosing the Right Incoterm for China Imports

If you import from China, three Incoterms cover the vast majority of deals: FOB, DAP and DDP. They sit at different points on a spectrum — from “I’ll handle the shipping myself” to “deliver it to my door, everything included.” Choosing well affects your cost, control and risk. Here is how they compare.

FOB — you control the freight

Under FOB (Free On Board), the seller delivers the goods onto the vessel at the origin port and clears them for export. From that point, the freight, insurance, destination charges, customs clearance and duty are yours.

• Best for: importers who ship regularly, have their own forwarder, and want control over routing and rates.
• Upside: you see the real freight cost and can shop it. No hidden margin buried in the product price.
• Watch out: you take on risk and responsibility once the goods are on board, including any destination surprises.

Note: FOB is technically a sea-only term. For containerised cargo, FCA is the more correct equivalent, though “FOB” is used loosely across the industry.

DAP — delivered, but you clear customs

Under DAP (Delivered at Place), the seller arranges and pays transport all the way to your nominated address. You handle import customs clearance and pay the duty and import taxes.

• Best for: buyers who want a simple door delivery but still want to control — and see — their own import duty and tax.
• Upside: one party manages the freight; you keep visibility of the customs bill.
• Watch out: you must be ready to clear customs and pay duty, or the shipment can stall at the border.

DDP — everything included

Under DDP (Delivered Duty Paid), the seller handles literally everything: freight, destination charges, import clearance and duty, delivered to your door.

• Best for: newer importers, low shipment volumes, or anyone who wants a single all-in price with no logistics involvement.
• Upside: maximum simplicity — you receive the goods and that is it.
• Watch out: convenience has a cost. The duty and handling are bundled into the price, often with a margin, and you lose visibility into what you are actually paying for freight and tax. DDP also relies on the seller clearing customs correctly in your country.

A quick way to decide

• Want the lowest landed cost and have a forwarder? FOB / FCA.
• Want door delivery but control of your duty? DAP.
• Want zero hassle and a single price? DDP.

The bottom line

There is no universally “best” term — only the one that fits your volume and appetite for involvement. As you grow, many importers move from DDP toward FOB to gain control and cut cost. If you are unsure, ask your forwarder to price the same shipment under each term; the comparison usually makes the right choice obvious.