EXW vs DDP: Comparing the Two Extremes of Incoterms
EXW (Ex Works) and DDP (Delivered Duty Paid) are the two extremes of Incoterms 2020. Under EXW the seller does the minimum; under DDP the seller handles everything including import duties. The right choice depends on logistics capability and risk appetite.
EXW and DDP: Two Extremes
EXW (Ex Works) and DDP (Delivered Duty Paid) represent the two opposite ends of the Incoterms 2020 responsibility spectrum. Under EXW, the seller's obligation ends at making goods available. Under DDP, the seller handles everything through to the buyer's door including customs and duties.
Full Comparison
| Responsibility | EXW | DDP |
|---|---|---|
| Make goods available | Seller | Seller |
| Loading | Buyer | Seller |
| Export customs | Buyer | Seller |
| Main transport | Buyer | Seller |
| Insurance | Buyer | Seller |
| Import customs | Buyer | Seller |
| Duties and taxes | Buyer | Seller |
| Destination delivery | Buyer | Seller |
| Unloading | Buyer | Buyer |
Cost Illustration
| Item | EXW | DDP |
|---|---|---|
| Quoted price | 10,000 EUR | 14,500 EUR |
| Loading + inland | +200 EUR | Included |
| Export customs | +100 EUR | Included |
| Freight | +800 EUR | Included |
| Insurance | +50 EUR | Included |
| Import customs | +150 EUR | Included |
| Duties + taxes | +2,800 EUR | Included |
| Delivery | +300 EUR | Included |
| Total cost | ~14,400 EUR | 14,500 EUR |
Total cost is often similar. The difference is convenience and control.
When to Choose Each
EXW Works Best For
- Buyers with strong logistics capabilities
- Consolidation from multiple suppliers
- Domestic (same-country) transactions
- Buyers wanting maximum control
DDP Works Best For
- Buyers without import experience
- E-commerce transactions
- Sellers offering door-to-door service
- When all-inclusive pricing is desired
Frequently Asked Questions
Are there Incoterms between EXW and DDP?
Yes, there are 9 other terms (FCA, FOB, CIF, DAP, etc.) offering various levels of responsibility. Most trade uses FCA, FOB, CIF, DAP, or DDP.
Which does the ICC recommend?
ICC recommends FCA over EXW (export customs issue) and considers DDP appropriate for sellers with strong logistics networks.
Which does Kolay Parsiyel use?
Kolay Parsiyel typically operates DAP (door delivery, customs by buyer) or DDP (full door-to-door including customs).
Can a seller switch from EXW to DDP?
Yes. Moving to DDP gives competitive advantage through buyer convenience, but requires logistics capability. Kolay Parsiyel can serve as the logistics partner to enable this.
References
- ICC Incoterms 2020
- UNCTAD Trade Terms
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