The four terms you will actually see
| Term | Seller pays up to | You pay from there |
|---|---|---|
| EXW (Ex Works) | Goods packed at the factory door | Pickup, export clearance, freight, import duties, delivery |
| FOB (Free on Board) | Goods loaded on the vessel at the Chinese port, export cleared | Ocean/air freight, insurance, import duties, destination handling, delivery |
| DAP (Delivered at Place) | Freight to your address | Import duties and taxes, sometimes destination terminal fees |
| DDP (Delivered Duty Paid) | Everything including duties and taxes, delivered to your door | Nothing further |
EXW is what most Chinese factories quote by default because it is the price of the product and nothing else. DDP is what a landed-cost comparison needs.
Where the hidden 40% comes from
Between EXW and DDP there are six to eight cost lines, and a quote that stops early simply does not show them. The usual suspects on a China to US shipment:
- Factory to port or warehouse trucking: $40–120 per pickup.
- Export declaration and port handling in China: $60–150 per shipment.
- Ocean or air freight: the only line most people compare.
- Destination terminal handling and deconsolidation: $120–260 for LCL.
- Customs brokerage: $85–150 per entry.
- Duties and tariffs: often the largest line after the goods themselves.
- Last-mile delivery to a 3PL or FBA, with appointment: $150–400.
- Cargo insurance: 0.3–0.5% of value.
A DAP quote hides the duty line. A FOB quote hides everything from the port onward. Two "$190 per m³" quotes can still differ by $500 once terminal fees and delivery appear on the final invoice.
How to compare quotes line by line
Ask every party to fill the same table: goods, origin handling, freight, destination handling, brokerage, duties, delivery, insurance. If a line is blank, ask who pays it. Then compare the bottom row only. The quote with the lowest freight line is irrelevant if its destination handling is double.
For recurring restocks, insist on DDP. It is the only term where the number you approve before the deposit is the number you pay at the end.
When EXW or FOB is the right choice
If you already have a freight forwarder with better rates than your supplier, FOB lets you control the shipping leg. If you consolidate several factories into one shipment, you need EXW or FOB from each of them and a DDP contract with whoever consolidates. Buying DDP from each factory separately means several customs entries and no consolidation saving.
Frequently asked
Is DDP more expensive than DAP? +
The total cost is the same; DDP simply includes the duty line in the quote instead of leaving it for you to pay at the border. DDP removes the surprise, not the cost.
Who is the importer of record under DDP? +
Usually the forwarder or agent, through their customs broker. Make sure the contract names them, so a customs query does not land on you without warning.
Can a Chinese factory quote DDP to the US? +
Some do through a forwarder, but factory DDP quotes often bundle an inflated freight margin. Compare them against an independent DDP quote on the same table.
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Figures are indicative floor rates and typical fee ranges on our lanes as of Oct 11, 2026. Duty rates depend on your product's tariff code and declared value. This is general information, not customs or legal advice.