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DDU/DDP Shipments
Delivered Duty Paid (DDP) is a delivery agreement under which the seller bears all responsibility, risk and cost associated with the transportation of goods until the buyer receives or transfers them to the destination port. This agreement includes payment of shipping costs, export and import duties, insurance, and any other expenses incurred during shipping to an agreed upon location in the buyer's country.
DDU (Duty Unpaid): Customer pays for shipping only at checkout. Any additional duties, taxes or customs duties are paid after the package reaches customs. Customers are expected to deposit payment at the local post office from where they collect the package before the package is released from customs. For this reason, DDUs often hold shipments at customs.
Air freight, also known as air forwarders, are companies that provide forwarding service for imported goods, especially goods that will be sold in a third country. Air freight forwarders can handle the import of goods into the United States from anywhere in the world by arranging customs clearance and consolidating shipments, so it is more cost effective to do so.
What Happens at Customs ?
Has a package you purchased ever got stuck at customs? This is not something that everyone has dealt with personally, and it is good for sellers to understand what it takes for the consumer to get it.
The shipment has to go through certain steps at each customs clearance (in the origin country and the destination country) before it is released. If your documentation is incomplete or unclear your products will be held at one of these stops:
- Origin country scans. Before getting on a boat or plane, a shipment leaving the US will need to pass through US customs. An agent will check to ensure you’re not shipping any contraband.
- Commercial Invoice. To get through US customs smoothly, it’s imperative that the listed contents on your documentation clearly match what’s being exported. Agents will also use the information on your commercial invoice to relay any specifics to the destination country (like tax liability).
- Travel. After your shipment passes through US customs, it will board a plane or ship and be transported to it’s next stop.
What do DDU and DDP mean in shipping terms ?
DDU Incoterms payment (or delivery charges unpaid) means that the recipient/customer will be contacted by Customs after the shipment arrives, and will have to settle any charges for Customs to release the shipment and deliver it to the customer.
DDP Incoterms payment (or payment of delivered duty) means that the sender is responsible for paying the duties. In many ecommerce cases, the seller includes these duties at checkout and collects payment directly from the customer for DDP Incoterms.
- DDP Incoterms shipping sees the seller pay for any and all of the costs required to bring their product into the destination country of the buyer
- LDP stands for landed-duty paid and refers to the final price the sender is responsible for when selling their products cross-border
- DDP Incoterms payment (or delivered duty paid) mean the sender is responsible for paying the duties
