When it comes to international shipping, two common Incoterms you’ll encounter are DDP (Delivered Duty Paid) and DDU (Delivered Duty Unpaid). These terms define the responsibilities of buyers and sellers in global trade, especially regarding customs duties, taxes, and delivery responsibilities. Knowing the difference between them is crucial for managing costs and avoiding surprises at customs.
What is DDU (Delivered Duty Unpaid)?
DDU, while no longer an official Incoterm (it was replaced by DAP - Delivered At Place in 2010), is still commonly used in practice. Under DDU, the seller delivers the goods to the destination country, but does not pay for import duties or taxes. This is the default incoterm for international shipments.
Key Points:
The seller pays for shipping to the destination country.
The buyer is responsible for paying import duties, taxes, and handling customs clearance.
Delivery might be delayed if the buyer isn’t prepared to pay the fees.
What is DDP (Delivered Duty Paid)?
DDP means the seller takes full responsibility for delivering the goods to the buyer’s location, including all costs related to shipping, customs clearance, import duties, and taxes.
Key Points:
The seller pays for shipping and all import duties and taxes that will be reflected on your Manifest Invoice.
The seller arranges customs clearance in the destination country.
The buyer receives the goods ready to unload, with no additional charges.
If you'd like to apply DDP incoterms to your shipments, please reach out to your Account Manager for these settings to be implemented.