DDU / DDP / FOB Trade Terms Explained — Liability Boundary and Costs
The three most common questions from new customers: “Do I pay duty or does AYC pay? What do I still need to do?” — this is essentially DDU / DDP / FOB responsibility split.
1. Five key stages of international logistics
- Pickup from factory → port
- Export clearance → China departure
- International transit → destination port
- Import customs → entry + duty
- Last-mile delivery → buyer’s door
Different terms differ on who handles stage 4 and 5.
2. Three terms compared
| Term | Export | Ocean/Air | Import | Duty | Last-mile | Best for |
|---|---|---|---|---|---|---|
| FOB (Free On Board) | ✅ Seller | ✅ Seller | ❌ Buyer | ❌ Buyer | ❌ Buyer | Bulk trade; buyer has customs capacity |
| DDU (Delivered Duty Unpaid) | ✅ Seller | ✅ Seller | ✅ Seller | ❌ Buyer | ✅ Seller | Buyer can’t clear customs but pays duty |
| DDP (Delivered Duty Paid) | ✅ Seller | ✅ Seller | ✅ Seller | ✅ Seller | ✅ Seller | Seller one-stop door delivery |
Memory aid: FOB ends at “on board”; DDU delivers door-to-door but no duty; DDP = full package.
3. Real cost comparison (20HQ USWC, USD 50,000 cargo value)
| Cost item | FOB | DDU | DDP |
|---|---|---|---|
| Pickup + export clearance | ¥2,000 | ¥2,000 | ¥2,000 |
| Ocean freight | ¥18,000 | ¥18,000 | ¥18,000 |
| Import customs fee | — | USD 250 | USD 250 |
| US duty (3% of cargo value) | — | — | USD 1,500 |
| Last-mile truck | — | USD 500 | USD 500 |
| Total | ¥20,000 | ~¥21,500 | ~¥30,000 |
DDP looks expensive, but buyers prefer it — Amazon FBA shipments under DDP are increasingly common.
4. FBA loophole variant of DDU
The US de minimis duty-free threshold (USD 800 per shipment per consignee) used to let FBA sellers use “DDU + individual consignee” to avoid duty. Since 2025 that’s tightened:
- Repeated shipments to same consignee → flagged as “obvious sale” → must apply DDP duty.
- Recommendation: under USD 800 cargo via “low-value express”; over that via formal DDP.
5. AYC’s selection tip
- First-time shipper: DDU; get the buyer familiar with the flow, switch to DDP later.
- FBA long-term restock: DDP; avoids customs delays during peak season.
- Big-buyer contracts: FOB also works if buyer has own customs team.
Need a cost calculation specific to your goods, contact AYC sales.