What does DDP mean? Get to grips with Delivered Duty Paid, who handles customs and import formalities, when the risk passes, and the difference between DDP and DAP.
DDP stands for Delivered Duty Paid and is one of the delivery rules in Incoterms 2020. Under DDP, the seller is responsible for transport to the agreed place of delivery as well as customs clearance and other import formalities, along with the associated customs duties and import costs.
What does DDP mean?
DDP is short for Delivered Duty Paid and is an Incoterm.
Under DDP, the seller is responsible for getting the goods transported to the agreed place in the destination country. The seller also handles customs clearance and other import formalities and pays the associated customs duties and import costs.
The risk passes to the buyer when the goods are placed at the buyer’s disposal on the arriving means of transport, ready for unloading at the agreed place. The buyer is responsible for the unloading itself.
Who pays customs duties under DDP?
Under DDP, it is the seller who handles import customs clearance and the associated customs duties and import costs.
This sets DDP apart from delivery terms such as DAP, where the buyer handles customs clearance and other import formalities. Under DDP, this part of the delivery lies with the seller.
For businesses that send goods to customers across a customs border, DDP therefore means that customs duties and import costs are handled by the sender rather than the receiver.
How does DDP work in practice?
In a sale on DDP terms, the buyer and seller agree on a specific place of delivery. This could be the buyer’s address or another agreed destination, for example.
The seller arranges transport to the agreed place and bears the risk during transport until delivery. At the same time, the seller handles customs clearance and other import formalities.
Once the goods have arrived and are placed at the buyer’s disposal, ready for unloading, the risk passes to the buyer.
DDP should be stated together with the agreed place of delivery and the version of Incoterms used, for example DDP [named place], Incoterms 2020.
What is the difference between DDP and DAP?
DDP and DAP (Delivered at Place) are similar, because in both cases the seller is responsible for getting the goods transported to the agreed destination. The key difference lies in how the import is handled.
Under DDP, the seller handles customs clearance and other import formalities as well as the associated customs duties and import costs. Under DAP, these obligations lie with the buyer.
The difference is particularly relevant for shipments that cross a customs border, because the choice between DDP and DAP determines who handles customs clearance and the associated import costs.
DDP and Shipmondo
When you book international shipments through Shipmondo, DDP can be selected as the Incoterm for carriers and shipping products that support it.
When filling in customs documents automatically, you can specify DDP under Incoterms. This means that the customs costs for import into the destination country are to be charged to you as the sender.
The options depend on the selected carrier and the specific shipping product. For example, PostNord supports DDP for a number of export products in Shipmondo. DDP can also be selected for relevant DSV XPress shipments to countries outside the EU, among others.
If you use Shipmondo’s API for freight booking, Incoterms can also be specified as part of the shipment data for supported carriers.