What do the Incoterms EXW and DDP mean?

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Ex Works (EXW) and Delivered Duty Paid (DDP) are the two Incoterms that are the most heavily weighted toward either the buyer or the seller.  Under the term EXW, the buyer is responsible for all aspects of the shipment, even packaging of the goods under some circumstances.  On the other hand, DDP requires the seller to take responsibility for delivering the goods, and paying all fees, from the seller’s warehouse all the way to the buyer’s final destination.  Additionally, unlike FOB or CFR, both of these terms may be used regardless of the mode of transport and may be applied to the transport of goods by air.

EXW and DDP tend to be less commonly used by business partners who are negotiating from relatively equal positions.  Having either the buyer or the seller take on full responsibility for the delivery of the goods is a considerable burden and it is less likely that one party would agree to accept that burden unless negotiating from a much weaker position.  However, the simplicity of these terms, and the fact that they can be used with air transport, does make them a realistic possibility under certain circumstances.

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