With tariff volatility already reshaping landed-cost math in early 2025, it is a good moment to revisit a more basic question new customers raise constantly: what do FOB, EXW, and DDP actually mean, and which one should be on a purchase order?
The buyer takes responsibility for goods the moment they leave the factory floor: arranging and paying for inland freight, export clearance, ocean or air freight, import duties, and final delivery. It looks like the lowest unit price on a quote sheet, but it shifts the most logistics burden and risk onto the buyer.
The supplier handles inland transport and export clearance, delivering goods loaded onto the vessel at the origin port. From that point, the buyer owns freight cost, marine insurance, import duties, and destination logistics. FOB is the most common term in packaging sourcing because it gives buyers control over freight forwarders and insurance while leaving factory-side logistics to the supplier who already has those relationships.
The supplier handles everything, including import customs clearance and duty payment, delivering to the buyer's door. DDP looks the simplest, but buyers should scrutinize how tariffs are calculated and disclosed inside a DDP quote: duty stacking from Section 301 and IEEPA orders can be buried in a DDP price in ways that make cost comparisons across suppliers difficult. Jadewell's tariff tracker shows where China and Vietnam rates currently stand.
Whichever term applies, confirm it explicitly in writing on every purchase order: ambiguity here is one of the most common sources of landed-cost disputes. For a side-by-side FOB quote across Jadewell's China and Vietnam facilities, request a quote.