Landed Duty Paid (LDP) is the final price a retailer or brand pays for goods (especially apparel) imported across borders. Prices include delivery, shipping, insurance, duties and customs clearance.
Taxes paid have long been known, so wholesalers know exactly what to pay when the goods arrive at the port. However, some elements of total pricing are estimates. In the wholesale industry, it is common for wholesalers to sell products before they receive them.
If this is the case, an estimated Landed Duty Paid (LDP) must be calculated to determine a profitable sale price.
Landed Duty Paid (LDP) shipping terms include costs for fabrication, handling, handling, packaging and shipping. Depending on how you import your goods, you may have to pay additional ocean, air and inland LDP shipping charges. Additional costs such as exchange rates, procurement duties, due diligence costs, etc. are included in the overhead.
What is the difference between Landed Duty Paid (LDP) and FOB?
LDP means “land tax paid” price. The final price the brand or retailer pays for the finished product, including shipping, duties, delivery, insurance, and customs clearance.
FOB means “freight on board” price. The price the brand pays the supplier at the factory gate, before shipping and import fees.
Landed Duty Paid (LDP) must pay attention to the following points:
1. The import at the destination port can be successfully cleared: Since all the overall transportation is handed over to the freight forwarder, the smoothness of the customs clearance at the destination port depends entirely on: whether the local customs import record of the third party is good;
The Whether the operation record of the freight forwarder in the local customs is good, and whether the customs clearance qualification of the local customs clearance bank in the local customs is good;
2. Due to strong seasonality, Landed Duty Paid (LDP) garment transportation often has strict requirements on transportation time. Under normal circumstances, the whole container of goods can be delivered within 3 working days after arriving at the port, and the LCL distribution will be delayed by 1-2 days;
3. In the actual operation process, the requirements on the documents are relatively high, and when the Chinese customs export declaration The data is as accurate as possible (pieces of hair), and AMS and ISF try not to change it.
What are the advantages of Landed Duty Paid (LDP) ?
High security
Buyers of Landed Duty Paid (LDP) transportation place relatively large orders. As long as the goods are not contraband and the goods and information are accurate, both China and the United States have formal double customs clearance, and there is no risk of false reporting.
Low cost
Different from DDP, the core of Landed Duty Paid (LDP) is that the consignor needs to designate a third-party company to appear at the consignee of the document. Taking textiles as an example, an experienced third-party company can declare the goods at a reasonable price within the price limit. , so that the product has a better price advantage to enter the market.
Increase the time of goods operation and optimize the supply chain
Taking the US market as an example, textiles are a product that pays great attention to the turnover rate of goods circulation. Under the traditional trade model, traders are usually trapped and unstable shipping schedules in order to save intermediate logistics costs. Due to the great optimization of the overall supply chain cost in LDP, traders also have more choices.
Landed Duty Paid (LDP) risks
1. If the payment has not been received, it will be delivered.
For buyers, the operation mode of Landed Duty Paid (LDP) is more convenient, so the cooperation volume of this transaction method will be more stable than that of FOB and CIF.
In order to ensure the right of goods, it is recommended that the consignor collect the payment for the goods before delivery, and then deliver the goods, so as to control the rights of goods in their own hands as much as possible.
2. Inadequate professionalism.
In order to collect the goods, the freight forwarder was full of promises at first, but after the goods arrived at the destination port, they found that the customs clearance procedures were not complete and could not be cleared.
At this time, the consignor received the news and could only temporarily change the freight forwarder. After the goods arrive at the port, it is not only anxious to find an agent who can undertake it, but also may delay the original delivery time.
3. Landed Duty Paid (LDP) risk.
Under the LDP trade terms, the seller is not only responsible for the cost and insurance of the entire shipment of goods, but also for customs clearance, tax payment and delivery in the destination country. It is recommended that sellers give priority to knowing all operational details and processes when choosing a freight forwarder. In this way, even if there is a risk, the freight forwarding company can respond in time.
How does the Landed Duty Paid (LDP) deal with risks?
Simplified Bill of Lading
In actual operation, the requirements for documents are relatively high, so the data should be guaranteed to be accurate (pieces of hair) during the customs export declaration, and AM/ISF should try not to change it.
If it is LCL, the number of air freight containers is wrong and must be changed. If the difference between the data of the whole container by sea freight is not large, do not change it.
Control the transit time
For clothing products with strong seasonality, it is necessary to control the transportation time, so as not to miss the sales opportunity and cause unnecessary losses.
Find a reliable freight forwarder for smooth customs clearance.
Since all transportation matters are handled by freight forwarders, the smoothness of customs clearance at the destination port depends more on the freight forwarder’s operational records at the local customs and whether the customs clearance qualifications are good.
Brand authorize
If the seller is making branded goods, the consignee should prepare the authorization so that it can be provided in time for customs inspection, so as to avoid high storage fees and demurrage fees caused by untimely issuance.
Take it easy
If you encounter random inspection by the customs, the unpacking inspection is completed, and the goods are normal, the goods can be picked up in about 5 working days after they arrive at the port. If it is X-RAY inspection, under normal circumstances, 3 working days, NY will be a little slower. All inspection fees are provided with documents.
