|
Comparison Aspect |
FOB (Free On Board) |
DDP (Delivered Duty Paid) |
|
Core Responsibility |
Seller loads goods onto the vessel at the port of shipment; responsibility ends there. |
Seller delivers goods to the buyer’s specified destination, handling all costs and risks until final delivery. |
|
Risk Transfer |
Risk transfers to buyer once goods are loaded onto the vessel. |
Risk remains with seller until goods are physically delivered to the buyer at the destination. |
|
Cost Liability |
Buyer pays: - International freight - Insurance - Import duties/taxes. |
Seller pays: - All transportation costs (origin to destination) - Export/import customs fees - Duties/taxes - Insurance (if required). |
|
Transport Arrangement |
Buyer selects carrier and manages logistics. |
Seller arranges full transportation (including customs clearance). |
|
Insurance |
Optional for buyer (not required by seller). |
Seller typically arranges insurance (covered in DDP costs). |
|
Customs Clearance |
Seller handles export clearance; buyer handles import clearance. |
Seller handles both export and import clearance. |
|
Unloading |
Buyer responsible for unloading at destination. |
Seller responsible for unloading and final delivery. |
|
Applicable Transport Mode |
Maritime or inland waterway transport. |
Any transport mode (e.g., sea, air, road). |
|
Legal Framework |
Based on Incoterms® 2020 (valid for FOB). |
Based on Incoterms® 2020 (valid for DDP). |
