EXW, FCA, FOB and DDP: What Buyers Need to Confirm
Understand the basic delivery responsibilities in common Incoterms® rules and ask the right questions before accepting a quote.
Table of contents
Include the rule, place and version
Write a quotation term as the agreed rule plus the named place or port and “Incoterms® 2020.” A three-letter label alone leaves an important part of the arrangement unspecified. These rules address delivery responsibilities, costs and risk; separately agree on payment, specifications, ownership and remedies in the purchase contract.
Compare the basic responsibilities
The table below summarizes the practical starting point and the key question to ask for each rule.
| Rule | Practical starting point | Key buyer question |
|---|---|---|
| EXW | Seller makes goods available at the named place; buyer takes extensive transport and clearance responsibilities. | Who handles loading and export formalities, and can we arrange them? |
| FCA | Seller delivers to the nominated carrier or party at the named place and handles export clearance. | What exact handover location and loading arrangement apply? |
| FOB | Seller delivers aboard the nominated vessel at the named shipment port. For sea or inland waterway transport. | Is an onboard delivery arrangement appropriate for this shipment? |
| DDP | Seller takes extensive responsibility through delivery at the named destination, including import clearance and applicable duties/taxes. | Can the seller legally and practically perform the import obligations? |
ICC advises considering FCA where container goods are handed to a carrier before being loaded aboard a vessel. Do not apply FOB to an air shipment.
Check a DDP offer carefully
Clarify the importing entity, shipment records, product approvals, delivery point and charges included. A “door-to-door” marketing phrase is not enough to establish a complete DDP agreement. Confirm how you will receive the documents your business needs.
Before approving the quote
Ask where risk transfers, who buys any cargo insurance, which charges remain outside the quote, and what happens if goods cannot be cleared. Review the full agreed rule with your logistics provider for the transaction.
- •ICC Incoterms® 2020 introduction.
- •ICC FCA and FOB explanation.
- •ICC DDP and other any-mode rules.