DDP vs DAP vs FOB when sourcing from China

Direct answer

Choose control and lawful execution—not the shortest quote

DDP can look simple because the seller quotes delivery through import. DAP leaves import formalities with the buyer while the seller carries transport risk to the named destination. FOB transfers delivery and risk when goods are onboard the vessel at the named port of shipment and is limited to sea or inland-waterway transport. None is automatically cheapest or safest.

The buyer-side comparison

This is a high-level comparison of the named rules, not the full ICC text. The exact named place or port and the contract’s additional terms determine how the allocation works in practice.

DDP: convenience creates an import-control question

Under DDP, the seller takes responsibility through import clearance and delivery at the named destination. ICC’s checklist explicitly notes that import clearance under DDP may pose problems. Before accepting the quote, establish who will appear in each customs role, whether that party can lawfully act, what value and classification will be declared, and which records the buyer will receive.

DAP: seller carries to destination; buyer controls import

DAP can preserve a seller-arranged transport path while leaving import formalities with the buyer. That is not “DDP without duty.” The buyer needs an importer setup, broker instructions, classification and valuation work, admissibility documents, tax/duty funding and a process for holds or examinations. The named place should be precise enough to show where delivery occurs and what happens before unloading.

FOB: do not make it the default label for every container

FOB is for sea and inland-waterway transport and delivers when goods are onboard the nominated vessel. ICC’s current FCA-or-FOB guidance points buyers toward FCA when goods move in containers or pallets through multimodal transport. Under FCA, the exact handover point can better match delivery to the carrier before the container is onboard.

Practical comparison: ask the forwarder where it takes control, who completes export clearance, who is responsible before loading, and which transport document is needed. Then quote the rule, named place or port, and “Incoterms 2020” in the offer and contract.

What the Incoterms rule does not finish for you

Keep customs facts visible even when the seller arranges delivery

For U.S. imports, CBP places a reasonable-care responsibility on the importer and explains that customs value may require additions beyond the invoice line price, including applicable packing, assists, royalties, production costs, selling commissions and proceeds. A low all-in DDP number does not answer whether the declaration is correct.

Ask for the commercial invoice, packing list, transport document, entry or clearance record where available, duty/tax evidence, declared classification and value basis, and the identity of the importer and broker. If the transaction structure prevents the buyer from seeing how its goods entered the market, record that as a control gap.

A six-question rule-selection meeting

1. 1. Delivery: at which exact point should risk transfer?
2. 2. Transport: who should contract each leg and control the carrier?
3. 3. Export: which party can perform and evidence origin formalities?
4. 4. Import: who can legally act and exercise destination obligations?
5. 5. Documents: which records must each party receive and retain?
6. 6. Exceptions: who pays and decides after a hold, exam, delay or correction?