Under FOB you clear customs and pay duty at destination; under DDP the seller does both. The question that decides between them is simple: who should carry the customs risk? If you’d rather not, DDP; if you want control and lower cost, FOB with your own broker.
Who bears what — DDP vs FOB
| DDP | FOB | |
|---|---|---|
| Customs clearance | Seller (both ends) | You / your broker |
| Import duty & VAT | Seller pays, baked into price | You pay at border |
| Risk at the border | Seller’s | Yours |
| Transit to door | Included | You arrange last-mile |
| Best when | No broker / FBA / high duty | You have a broker / want control |
The “fake DDP” trap
Watch this: Some factories quote “DDP” but the contract says FOB, or the price excludes duty “estimated at border.” If you’re billed duty on arrival, it was never DDP. Always get the Incoterm and prepaid duty in writing.
When to run your own DDP via a forwarder
If you like DDP’s predictability but don’t trust the factory’s number, pick your own forwarder to run DDP — they clear both ends, prepay duty, and show you the line items instead of a bundled guess.
For the clearance mechanics and fee table behind DDP, see who carries the customs risk and the hidden port fees. And for the overall cost frame, our main Alibaba shipping cost guide compares landed costs across Incoterms.
Under FOB, this is the fee stack YOU inherit
DDP bakes these in; FOB hands them to you at the border. The “cheaper” FOB headline can erode fast:
| Fee you now own | Why it appears |
|---|---|
| ISF + AMS | You (or your broker) must file; late ISF = up to $5,000 penalty |
| THC + CFS | Destination terminal handling and LCL stripping |
| MPF (~0.3464%) + HMF (0.125%) | CBP processing on customs value |
| Single Entry Bond | Required if you have no continuous bond |
| Chassis Split / Pier Pass | US drayage & port congestion fees |
| Demurrage / Detention | Miss the ~4–5 day free window and daily fees accrue |
| Last-mile + appointment | You book final delivery separately |
Fee names and mechanics below are standard US-import items. Amounts are typical reference ranges that vary by carrier, terminal, and year — confirm the current CBP schedule and your forwarder’s line items before booking. None of this is a live quote.
Documentation: who files the ISF under FOB
Under FOB you are the importer of record — the ISF and entry are filed under your EIN (or your broker’s bond on your behalf). The forwarder can file, but the liability is yours. A missing or late ISF is your penalty, not the factory’s. This is the practical difference vs DDP, where the seller files and prepays.
Edge cases
- Fake DDP. If you’re billed duty on arrival, it was never DDP — you’ve been on FOB terms the whole time.
- De minimis removal. Low-value China shipments may need formal entry anyway; don’t assume “under $800 = no paperwork.”
- Restricted product. FOB doesn’t change admissibility — a banned item is seized whether DDP or FOB.
Transparency note: The DDP/FOB responsibility comparison follows Incoterms 2020 and was verified by the author. An AI model assisted with outlining and language. Duty rates and broker requirements vary by product and destination — verify before publishing.