EXW vs FOB vs DDP: what body parts actually cost landed

Two quotes for the same body parts can differ by 30% and neither one is wrong — they are just quoting different handover points. The unit price on the proforma is the smallest part of the comparison; what changes the answer is where risk transfers, who pays each leg, and which cost lines sit outside the four-corner quote.

This is the comparison we walk buyers through before they commit a first container. The Incoterms rules are generic mechanics; the numbers in the worked example are illustrative, not a quotation.

The four terms in one table

Term	Handover point	Risk transfers	Buyer pays	Seller arranges	Typical use
EXW	Factory gate in Changzhou	When goods are ready at the factory	Everything from factory onward, including China export clearance	Nothing beyond making the goods	Buyers with their own China consolidation agent
FOB	Loaded on board at the Chinese port	When the goods are on board	Ocean freight, insurance, destination charges, duty, inland delivery	Export clearance, inland haulage, terminal handling at origin	Experienced importers with a forwarder
CIF	Destination port	At the destination port	Destination charges, customs broker, duty, inland delivery	Freight and marine insurance to your port	First orders where you want one freight number
DDP	Buyer’s door	At delivery	Nothing beyond the invoice	Freight, insurance, destination clearance, duty, final delivery	New markets, small teams, buyers without a broker

EXW looks cheapest per unit and is the most work. Under EXW you also own the China export declaration, which usually means appointing a Chinese agent — practical for a trading company with a consolidation warehouse, rarely practical for a body shop buying 20 lamps. For most buyers of body parts, FOB is the default comparison point, CIF is a convenience upgrade, and DDP is a risk transfer with a price attached.

What “landed cost” actually contains

Landed cost is the number you can compare to your local wholesale price. It is built from six blocks:

1. Goods — SKU, quantity, packing specification, MOQ band.
2. Origin handling — inland haulage, export declaration, terminal charges at the Chinese port.
3. Main carriage — ocean or rail freight, plus a bunker/peak-season adjustment on some lanes.
4. Insurance — marine cargo cover, usually a percentage of the CIF value.
5. Destination charges — terminal handling, document fees, customs broker, CTN/ECTN or advance cargo declaration where the destination requires it, and the conformity inspection file where applicable.
6. Duty and taxes — HS-code duty, VAT or sales tax, and any anti-dumping or excise treatment for the product category.

The quote you receive will cover blocks 1–2 (EXW/FOB), 1–4 (CIF) or 1–6 (DDP). When someone says “DDP is more expensive”, they usually mean their invoice is larger — not their landed cost.

A worked example, clearly illustrative

Hypothetical mixed order: 20ft container, body parts with a goods value of USD 28,000, destination a Gulf port, all numbers rounded and used only to show the structure.

Cost block	EXW	FOB	CIF	DDP
Goods	27,300	28,000	28,400	30,100
China export handling	Buyer	Included	Included	Included
Ocean freight + insurance	Buyer	Buyer	Included	Included
Destination charges + broker	Buyer	Buyer	Buyer	Included
Duty and taxes	Buyer	Buyer	Buyer	Included
Final delivery	Buyer	Buyer	Buyer	Included
Approximate invoice	27,300	28,000	31,400	39,500

Read the table as a structure, not as prices. The invoice rises from left to right because the seller is absorbing work — but the landed cost can land within a few percent across the four columns. The DDP line is only comparable if it states the destination, the HS codes and the duty treatment; a DDP quote with no HS code is a number, not an offer.

The cost lines buyers forget

• Destination terminal handling and document fees. These rarely appear in an FOB quote and they are not small on some lanes.
• Customs broker and clearance time. A cheap forwarder without a broker at destination can cost more in demurrage than it saves in freight.
• Conformity inspection. PVoC/SONCAP-type schemes and Gulf conformity files have their own fees and timing — commonly required, confirm the scope with your broker before loading.
• CTN/ECTN/advance cargo declarations. Must be arranged before departure on several African routes; adding them later is expensive.
• Demurrage and detention risk. Free time at destination is not uniform; a delayed broker can turn a 7-day free window into a daily fee.
• Currency and payment fees. A 3% swing on settlement can wipe out the freight saving you negotiated.
• Inland delivery beyond the port. “DDP to your door” needs the exact address, not the port city.

Making two quotes comparable

Ask every supplier for the same six things before you compare numbers:

1. The same Incoterm on all quotes — convert everything to FOB landed plus your own estimates, or ask each supplier for both FOB and DDP.
2. The same packing data — measured carton dimensions and CBM per SKU, not catalogue estimates.
3. The same HS code per line, so duty is calculated on the same basis.
4. The same validity date — freight moves weekly; an old CIF number is history.
5. The same payment terms — deposit, balance, and whether the price includes the conformity file.
6. The same scope of supply — packing, labels, spare clips, sample cost and who pays the inspection.

A useful habit: put the quotes in a spreadsheet with one row per cost block and one column per offer, then add the buyer-side lines you know. The supplier with the lowest goods price is often not the supplier with the lowest landed cost. Our import process guide shows where each of these blocks sits on a first order, and the LCL vs FCL comparison covers the freight-mode decision that changes the answer more than the Incoterm does.

When each term is the right call

• EXW — you already have a Chinese consolidation agent and want to merge several suppliers into one container. Do the maths on export handling before you celebrate the lower unit price.
• FOB — you have a forwarder and a broker, and you want control of the route. This is the most transparent comparison for repeat orders.
• CIF — you want one number and someone else to book the vessel, but you are still the importer of record and you still clear customs.
• DDP — you are entering a market, you do not yet have a broker, and the supplier’s quote states destination, HS codes and duty basis. We quote DDP to most of the worldwide we serve, but a DDP price is only valid for the destination and product scope it was written for.

The decision rule

If two offers differ by less than about 8–12% landed, take the simpler one. If the gap is larger, the difference is almost never the Incoterm — it is a cost line in the middle of the table, and it is worth one email to find out which. The compare section covers the product-level comparisons (OEM vs aftermarket, steel vs plastic); the Incoterm decision belongs in the spreadsheet next to them.

For planning the physical load, the mixed container guide and the container loading guide show the CBM and packing rules that feed the freight line. And if you want the three terms side by side on your own SKU list, send the list with quantities and destination — or paste it into the bulk RFQ form and we will reply with FOB, CIF and DDP on the same quote. For a quick question, message the export team on WhatsApp — we answer with the same numbers, not a generic rate sheet.

FAQ

Which Incoterm should I compare on? Pick one basis and convert every offer to it. FOB is the most transparent comparison for repeat buyers; CIF bundles freight and insurance; DDP moves destination clearance and duty to the seller. If two quotes use different terms, compare landed cost, not the invoice price.

Does DDP include duty and destination charges? A proper DDP quote states the destination, the HS codes and the duty basis, and includes freight, destination clearance and delivery. Without those fields it is an estimate, not a landed number. Confirm the duty treatment with your broker, because rates change by product and destination.

How do I avoid hidden cost lines? Add origin handling, main freight, insurance, destination terminal handling, brokerage, duty, import taxes and inland delivery to the goods value. Then check the packing data: measured carton dimensions and CBM per SKU change the freight line more than a small unit-price difference.

Which shipping terms do you quote? We quote FOB, CIF and DDP depending on the lane. The written quotation confirms the SKU, packing and incoterm, and it is valid for the destination and scope stated on it. Ask for more than one term on the same SKU list so you can compare landed numbers directly.