What does Delivered Duty Paid Shipping (DDP Incoterms) mean?
Delivered Duty Paid Shipping (DDP) meaning
A DDP is an Incoterms rule that refers to a delivery agreement where the seller bears all transportation risks until the buyer gets the goods.
This makes the seller responsible for costs such as taxes during export and import clearance procedures, insurance, and transportation fees. All associated documents will also be under the seller’s care until the goods are successfully delivered to the destination country.
Pro tip
When is it better to choose Deliver at Place (DAP Incoterms) over DDP?
While DDP may appear attractive to buyers as the sellers bear all risks in the delivery of goods, sellers might raise prices to cover the additional costs.
Sellers should exercise caution when agreeing to a DDP sale because some countries mandate importers to have a local presence. If sellers anticipate import permission challenges, choosing DAP might be a better option.
Seller and buyer liabilities in the supply chain when using DDP
DDP can be used in multiple steps of the supply chain, including international procurement and after-sales service. This puts the seller responsible for handling shipping, customs, and delivery, and allows for the buyer to focus on their core business.
Seller liability |
Buyer liability |
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Responsibilities include:
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Get proof of delivery, handle inspection costs, and inform the buyer when the goods reach the agreed location. |
A package arrives at the destination, but the buyer does not need to pay Value Added Tax (VAT). In a DDP transaction, if the goods are damaged or lost in transit, the seller is liable for the costs. |
Once the package is delivered, the buyer now takes responsibility. |
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