DDP shipping(Delivered Duty Paid), which means “delivery after duty paid (…designated destination)”, this delivery method means that after the exporter has completed the import customs clearance procedures at the destination designated by the importer and exporter, the The goods are handed over to the importer.
DDU shipping (Delivered Duty Unpaid (… named place of destination), that is, “delivered duty unpaid (…named place of destination)”. This trade term refers to the actual working process of exporters and importers in the importing country the delivery of the goods is carried out at a certain place, in which the exporter must bear all the costs and risks of delivering the goods to the designated place, as well as the costs and risks of going through customs procedures.
Relevant regulations of DDU shipping
The seller must bear all the costs and risks of transporting the goods to the designated destination, except for import procedures and customs duties. The seller must bear all costs except import procedures and customs duties for the delivery of the goods to the designated destination, including: freight, insurance premiums, export taxes and related costs + appropriate profits + production costs.
Relevant regulations of DDP shipping from China to USA
The seller must bear all risks and costs of transporting the goods to the named destination, including any “taxes” payable at the destination when customs formalities are required (including the responsibility and risk of customs formalities, and the payment of handling charges, duties, taxes and other charges).
The difference between DDU and DDP
1. Different delivery methods
DDU is the delivery duty unpaid at the port of destination, and the goods are handed over to the buyer at the designated destination; DDP is the delivery duty paid at the port of destination, which means that the seller has completed the import customs clearance procedures at the designated destination, and will deliver the goods in the delivery vehicle. The unloaded goods are handed over to the buyer.
2. The import declaration is different
DDU shipping means that the seller handles the import declaration and bears the cost before delivery; DDP means that the buyer handles the import declaration, assumes the responsibility and risk of handling customs procedures, and pays handling fees, duties, taxes and other fees.
DDU shipping vs. DDP shipping: Which is better?
Shipments sent DDU may appear cheaper at checkout because there is no handling charge added on top of the customs duties that need to be paid.
However, it is the seller’s responsibility to inform the customer that duties will be applied when the goods arrive at customs. Very often, customers don’t even know they need to pay customs duties. When they get a call from customs asking for payment, it equates to an extra fee for them. This can negatively impact your customer experience.
DDP shipments are slightly more expensive upfront as the courier handles payment to customs on your behalf for an additional fee.
However, these fees are fixed and 3-4 times cheaper than DDU brokerage fees.
Paying these additional costs to your courier upfront ensures that your shipment clears customs and arrives without customs having to contact your customer directly for additional charges.
In our opinion, DDP shipping is the better choice. No one gets unexpected fees, resulting in a smoother delivery experience.
