What is the Meaning of the Incoterm DDP?

The parties involved in a foreign trade need to pay as much attention to the terms of the sales contract as to the sales price.  In order to remove confusions regarding terms related to international sales contracts, most countries have adopted an international set of trade terms known as International Commercial Terms, or Incoterms.

Incoterms clarify the risk and responsibilities of the sellers and buyers that relate to transit of goods from one place to another. One Incoterm that is important for parties to an international trade to know is Delivered Duty Paid (DDP).

Delivered Duty Paid — DDP: An Inside Look

DDP refers to a contract whereby the seller is responsible for the total costs that are associated with transporting the goods. The seller bears the costs and risks associated with the transport of goods until they are received by the buyer.

The responsibilities of the seller in case of DDP contracts include the following:

  • Export packaging
  • Obtain export clearance
  • Fulfill customs requirements
  • Arrange for proof of delivery
  • Inform the buyer when the goods reach the destination
  • Pay required costs and duties

The costs that are borne by the seller in case of DDP shipments include import and export duties, shipping costs and other costs associated with the transport of goods. Moreover, the seller must obtain customs clearance and other required approvals from the local authorities. A license of import must also be obtained by the seller.

Conclusion

DDP is an important incoterm that must be clearly understood by both the buyer and the seller.  Before sending shipments, the seller is required to know about the legal requirements of the destination country. This is not easy as the customs requirements in foreign countries are complex. Furthermore, the requirements for the DDP shipment are not the same in every country.

In most of the countries, the procedure for clearing the goods is lengthy and complex. The seller must have intimate knowledge of the process. Not knowing about the local requirements for clearing the goods can result in delays and penalties. That's why you should let an experienced importer of record/exporter of record (IOR/EOR) company such as GCE Logistics to take care of the logistics requirements.

We can help buyers and sellers import and export all types of commercial goods. By partnering with us, you can avoid the complications that are involved in the international trade. You can leverage from our decades of expertise in the foreign trade to solve all kinds of trade related issues. We offer cross border shipping services, projects handling services, warehousing and distributions, DDP customs clearance, land and air freight, importer of record (IOR) and many other services.

For more information about our value-added services for foreign traders, you can contact our commercial representative by clicking here.

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