Delivered Duty Paid (DDP) is a commonly used Incoterm in shipping and logistics. 

 

What does DDP mean?

DDP is short for Delivered Duty Paid. Delivered Duty Paid is an International Commercial Trade Term (Incoterm) that is agreed upon by both the buyer and seller, with more responsibility placed on the seller.

The trade term dictates which party is responsible for the shipment throughout its journey.

 

What does the DDP Incoterm dictate?

The DDP Incoterm dictates that:

  1. The seller assumes all costs and responsibilities for delivering the shipment to the named destination, including export and import duties, fees, formalities, and taxes. The seller has no obligation to insure the goods for either pre-carriage or main carriage.

  2. The buyer only takes responsibility for goods when they are unloaded at the named destination and is completely free from costs and risks until that point. In many cases, the named destination is the buyer’s own warehouse or place of business.

Top Tip: The Delivered Duty Paid Incoterm is the only Incoterm where the seller is responsible for import duty and/or import clearances and tax payments. When looking at sellers, it may be worth considering a seller who has experience with import clearance in your country, particularly if it is complex.

 

DDP Shipping Obligations

DDP shipping obligations are very straightforward for the buyer, compared to other Incoterms.

 

Obligations of the buyer

If you are the buyer, you are obligated to:

  • Obtain documents required by the seller, ie. Clearance formalities for export or import.

  • Pay for the goods concerning the sales contract agreed with the seller.

 

Obligations of the seller

If you are the seller, you are obligated to:

  • Handle commercial invoicing and goods documentation

  • Manage packaging for export

  • Manage export marking

  • Cover the cost of loading charges

  • Handle customs formalities and export licensing

  • Manage carriage for the entire journey

  • Deal with import formalities and duties

  • Cover the cost of shipment inspections

  • Deliver to the named destination

  • Provide proof of delivery

 

When to use DDP shipping?

Some shipments benefit more from DDP logistics:

  • Buyers who are concerned about scams - DDP shipping makes it in the seller’s best interest to complete the transaction.

  • If you are concerned about the route - due to all responsibility being on the seller, it is in their best interest to send the shipment via the safest possible route.

  • New business owners who have little knowledge of shipping - DDP puts the shipping process in the hands of the seller, who will navigate a lot of the complex processes like export and import.

 

View the SEKO Guide to Incoterms

With over 30 years of experience in international shipping, logistics, and supply chain management, SEKO has the knowledge and expertise to help you with all shipping requirements.

If you are new to shipping and wish to learn more about Incoterms, be sure to read our wider Shipping Incoterms guide, which provides deeper knowledge and offers routes to learn more in-depth about each term.