What is Delivered Duty Paid (DDP)?
DDP stands for “Delivered Duty Paid”, which is a delivery agreement between an international shipper and receiver. If goods are shipped with DDP terms, the shipper is responsible for the entire shipment until final delivery. DDP is an incoterm rule developed by the International Chamber of Commerce, and is widely used within international trade.
DDP is usually used by a buyer who does not want to enter into any kind of transport contract with any entity themselves. This allows them to use a third party to handle all the associated responsibilities until delivery is made.
International import and export can be an extremely complex process, with numerous legal obligations to adhere to. It can therefore often be safer to employ a professional DDP shipping service such as TecEx.
When a business uses a DDP service, the service provider takes on all the risks and responsibilities involved in bringing goods to the destination, clearing the goods for import and export, pay any duty for both export and import and carry out all customs formalities. This is irrespective of the mode of transport selected, and may also be used where more than one mode of transport is employed during delivery.
In DDP shipping, TecEx takes on all the responsibility of the delivery of the goods to the buyer at the agreed destination, so you don’t have to. We offer a full DDP service, covering everything from pre-compliance to final delivery, including our expert Importer of Record solution.
Benefits of DDP
Since the seller has full responsibility of the entire shipment, this creates security for the buyer. It means they don’t take on any of the risks or costs associated with shipping and customs clearance. As a result, it’s in the best interests of the seller to provide an excellent customer experience, ultimately benefitting the buyer.
On the other hand, having full responsibility for the shipment means sellers have full control over the process. This means they can better guarantee that goods will arrive at their destination on time and without any damages. It means they can choose the safest, most cost effective routes to generate the best return.
Buyers and sellers have full visibility and transparency over the shipment. It’s usually trackable via technology, so you can both see where your parcel is in the shipping process.
DDP Responsibilities for Sellers
Sellers have the following responsibilities as part of a DDP agreement:
- Meeting import, export and customs requirements
- Transportation of goods (via any kind of carrier)
- Cost of carrier and transportation
- Cost of inspections
- Cost of damages
- Customs clearance in the buyer’s country
- Licenses and approvals from local authorities
- Export clearance from the seller’s country
- Proof of delivery
- Alerting the buyer once the goods have reached their destination
However, sellers aren’t responsible for unloading the goods in the buyer’s country.
Difference Between DDP, DAP and DAT
Delivered Duties Paid (DDP) is a delivery agreement where the seller takes on all the responsibility for the entire shipment. In contrast, Delivered at Place (DAP) is an agreement where the seller takes on partial responsibility. Finally, Delivered At Terminal (DAT) is where the buyer is responsible for paying duties and taxes, and unloading the goods.
Read more in our full guide to the difference between DDP, DAP and DAT.
The TecEx DDP Shipping Process
When it comes to customs compliance, each country has its own laws and regulations. TecEx has an extensive knowledge of these regulations, and can sort everything you need pre-shipping like product codes, HS codes and ECCN numbers.
Licenses and permits
TecEx will apply for all the relevant licenses and permits you need on your behalf.
Before you ship your goods, it’s important to understand the costs, so you can weigh up whether you’ll make a return. TecEx will calculate these costs for you – for example, import costs, duties and taxes, IOR fees – to accurately predict the financial impact of importing overseas.
Pick up of goods
We pick up your goods, no matter the location. For example, from a warehouse or manufacturing plant.
Manage global logistics
You have the option to work with any carrier you choose. However, we have relationships with freight providers, meaning we can get you the lowest rate possible.
As your Importer of Record (IOR), we take on all responsibility for customs clearance. We pay duties and taxes, for example, and guarantee first-time clearance on goods.
TecEx will coordinate the storage of your goods in the chosen destination.
We’ll arrange final delivery to your agreed address, so you don’t have to rely on a third party to do this for you.
Once your shipment has been delivered, we can hire any necessary equipment and install the goods, too.
DDP Shipment Fees
You need to calculate your DDP fees – ideally pre-shipment – so you can work out whether you’ll still make a profit. Here are some of the key fees involved:
If you handle DDP poorly, or choose an unreliable logistics partner, customs may be more likely to examine your goods. This can lead to delays, therefore increasing costs to your business. Likewise, if you have unreliable transportation, a late shipment can lead to knock on effects for your profits.
Before you transport your goods, you need to calculate shipping costs.
Shipping insurance isn’t essential, but it’s worth investing in to mitigate any risks and protect your finances.
With a DDP shipping agreement, the seller is responsible for VAT. However, you can transfer responsibility over to the buyer. In these cases, you need consent from both parties to do so. In some countries, VAT can sometimes be 15-20% of the value of the goods.
As the seller, you’re responsible for any fees associated with damages to your goods.
Storage and demurrage
Storage and demurrage charges are caused by delays from customs authorities, carriers, delivery drivers and other third parties. As the seller, you must absorb these costs. However, they’re often unanticipated, so it’s difficult to predict what the cost will be before shipping.
Frequently Asked Questions
If you do thorough research, and ensure you have a reliable shipping partner to help you navigate customs clearance, DDP shipping is a safe and reliable way to import your goods overseas.
- There may be unexpected fees, for example if your goods are delayed or get damaged.
- Customs clearance requires specialist knowledge, as each country has their own regulations. This can lead to costly mistakes if you’re not an expert.
- Sellers take on responsibility for the entire shipping process, which means that, if anything goes wrong, you have to incur the costs.
With a shipping partner like TecEx, we help you mitigate these risks.
TecEx’s DDP service can help you ship to over 200 destinations worldwide. DDP shipping is complex and, when handled incorrectly, can significantly impact your profits. TecEx manages the entire shipping process for you, so you can mitigate risk and pass on responsibility to us.
Each country has different importing and exporting requirements. As a result, you need specialist knowledge of local laws, taxes and regulations if you don’t want to incur fines. At TecEx, we use our extensive database and experience to guarantee you first time customs-clearance without any hassle. Not only that, we have established relationships with freight providers, so we can give you the best possible rates – ultimately saving you time, money and internal resources.Contact us
We’ll help you find the solution that works for you
Fill in the form to get in touch and our expert team will contact you with a bespoke customs compliance solution to suit your needs.