Delivery Duty Paid (DDP) is an Incoterm (International Commercial Term) where the seller assumes all responsibilities, risks, and costs associated with delivering goods to a specified destination. This includes paying for shipping costs, export and import duties, taxes, and any other charges incurred along the way. Under DDP terms, the seller delivers goods ready for unloading at the named place of destination.
DDP benefits the buyer by reducing the complexity, risk, and responsibility associated with importing goods. Since the seller handles all logistics of transport, customs clearance, and tariffs, the buyer does not have to deal with these aspects. This can be particularly advantageous for buyers who do not want to manage the complexities of international shipping and customs procedures.
Under DDP, the seller is responsible for arranging carriage and dealing with all procedures required to export and import the goods. This includes packing, labeling, export clearance, paying all tariffs and duties, carrying out any import clearance, and covering all costs and risks until the goods are delivered to the agreed destination. The seller must also ensure the goods are properly insured until they reach the buyer.
Sellers face several challenges under DDP terms, including the need to deeply understand the import laws and regulations of the buyer’s country. Managing logistics and customs in a foreign country can be complex and risky, notably if the seller lacks local presence or partnerships. The seller's financial burden is also higher, as they absorb all costs related to transportation and duties.
DDP facilitates easier access to foreign markets, especially for buyers unfamiliar with importing processes. It simplifies transactions and encourages trade by reducing the administrative burden on buyers. However, it places a significant obligation on sellers to manage logistics efficiently and understand international trade regulations comprehensively.
