Understanding who takes responsibility for a shipment can be confusing. Depending on the incoterm (shipping term) used, the different entities involved will have the full legal and financial responsibility of ensuring that the shipment can cross borders and clear customs. Our specialty is our DDP shipping solution – we have years of experience in making customs clearance simple and seamless. But before we start shipping, let’s have a closer look at DDP shipping and how this incoterm can benefit you.
Delivered Duty Paid (DDP) is a delivery agreement between an international shipper (seller) and a receiver (buyer). When goods are shipped under DDP shipping terms, the seller is the entity responsible for the entire shipment all the way to final delivery.
This incoterm rule was developed by the International Chamber of Commerce and is widely used within international trade. DDP shipping is used by a buyer who does not want to enter into any transport contract with any other entity. This allows them to use a third party to manage all the associated responsibilities until final delivery.
Due to the complexities and legal risks of international trade, it is often safer to use a professional DDP shipping service. This is because the service provider:
- Takes on all the risks and responsibilities involved in importing goods to the destination,
- Clears the goods for import and export,
- Pays any duties for both export and import, and
- Handles all customs formalities.
All of 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.
Benefits of DDP Shipping
Security for Buyers
Since the seller is completely responsible for the entire shipment, this creates security for the buyer.
This means that the buyer does not take on any of the risks or costs associated with shipping and customs clearance.
Full Control for Sellers
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 damage. It also means they can choose the safest, most cost-effective routes to generate the best return.
The TecEx DDP Shipping Solution
TecEx can do all of this for you. We take on all the responsibility for the delivery of the goods to the buyer at the agreed destination, so you don’t have to. We offer a full DDP shipping service, covering everything from pre-compliance to final delivery, including our expert Importer of Record solution. Furthermore, using our TecEx App gives you full visibility of your shipment.
Are you a value-added reseller (VAR)? Our DDP solution will work for you and help you win sales!
The Full List of DDP Shipping Responsibilities
Sellers have the following responsibilities as part of a DDP shipping agreement:
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- Meeting import, export, and customs requirements
- Transportation of goods (via any 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 DPU (formerly 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, at Place Unloaded (DPU) requires the seller to unload goods at a named destination (e.g., warehouse, depot).
Read more in our full guide to the difference between DDP, DAP, and DAT.
The TecEx DDP Shipping Process
Pre-shipping
01 Compliance
When it comes to customs compliance, each country has its own laws and regulations. Our extensive knowledge of these regulations means we manage everything you need pre-shipping – from product codes, HS codes, and ECCN numbers.
02 Licenses and permits
TecEx will apply for all the relevant import/export licenses and permits you need on your behalf, removing the burden from your business.
03 Cost calculation
Before you ship your goods, it’s important to understand the costs to accurately predict the financial impact of importing into a foreign territory. This includes import costs, duties, taxes, and IOR fees. TecEx will calculate these costs for you, so there are no unforeseen costing concerns.
In-transit
04 Pick up of goods
We pick up your goods, no matter the location – for example, from a warehouse or manufacturing plant.
05 Manage global logistics
You have the option to work with any carrier you choose. However, our network of freight providers means we can get you the lowest rate possible.
06 Customs clearance
As your Importer of Record (IOR), we take on all responsibility for customs clearance. We pay duties and taxes and guarantee first-time clearance of your IT gear.
Post-clearance
07 Storage
Should you need it, TecEx will coordinate the storage of your goods in the chosen destination.
08 Delivery
We’ll arrange final delivery to your final delivery address, so you don’t have to rely on a third party to do this for you. We have a global capability of shipping to over 200 destinations.
09 Equipment
Once your shipment has been delivered, we can hire any necessary equipment and install the goods, too.
DDP Shipping Fees
Some common fees that are involved in a DDP shipping transaction include:
- Customs duties
- Shipping fees
- Shipping insurance: Shipping insurance isn’t essential, but it’s worth investing in to mitigate any risks and protect your finances.
- VAT: With a DDP shipping agreement, the seller is responsible for VAT. In some countries, VAT can sometimes be 15-20% of the value of the goods.
- Damage fees: 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.
DDP Shipping FAQs
Is DDP shipping safe?
With a reliable import partner to help you navigate customs clearance, DDP shipping is a safe and reliable way to import your goods across borders.
What are the risks of DDP shipping?
- There may be unexpected fees, for example, if your goods are delayed or get damaged.
- Customs clearance requires specialist knowledge, as each country has its 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.
TecEx’s Complete Global Trade and DDP Shipping Solution
TecEx’s DDP shipping service can help you ship to over 200 destinations with ease. Delivered Duty Paid 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.
Now You Know:
The first set of Incoterms was published in 1936. These shipping rules are revised every ten years to reflect changes in trade practices. Currently, the most recent version is Incoterms 2020.
Don't Let DDP Get You Down. Get In Touch.
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.
Don’t Let DDP Get You Down. Get In Touch.
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.
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