Incoterms: Delivered Duty Paid (DDP)

Under delivered duty paid (DDP), the seller is in charge of all costs and risks until the goods are delivered to the buyer at the port. These include export clearance, customs documentation, payment of taxes, and import duty. This method can be for any mode of transport, but many companies use it only when they ship goods by sea or air freight.

Advantages & Disadvantages 

This delivery method poses a high risk for sellers since they must assume all responsibility until the delivery. However, that is also why it is highly beneficial for the buyers. The buyers are protected and guaranteed a safe delivery even if the goods are being transported across countries. The buyers can also find out the landed cost right at the time of purchase, and there are no arrangements of vendors. 

Seller and Buyer Obligations

Take a look at the table down below for a breakdown of the seller and buyer obligations. Make sure to keep these in mind when working under DDP:

Seller’s Obligations

General - Deliver the goods and commercial invoice.

Buyer’s Obligations

General - Pay the price of the goods as agreed in the contract of sale.

Seller’s Obligations

Delivery - Deliver the goods at the agreed date and time. Has full responsibility for placing the goods.

Buyer’s Obligations

Delivery - Take the goods after they are delivered.

Seller’s Obligations

Risks - Responsible for all of the risks until goods are delivered.

Buyer’s Obligations

Risks - Responsible for all of the risks once the seller delivers the goods. 

Seller’s Obligations

Carriage - Must contract carriage of goods to the destination and pay for the cost.

Buyer’s Obligations

Carriage - No obligation.

Must contract carriage of goods to the destination and pay for the cost.

Seller’s Obligations

Insurance - No obligation. 

Buyer’s Obligations

Insurance - No obligation. 

Seller’s Obligations

Delivery/transport document - Must provide a transport document at own cost.

Buyer’s Obligations

Delivery/transport document - Must accept the document.

Seller’s Obligations

Export/Import clearance - Responsible for all export clearance expenses. Must pay for all formalities required. 

Buyer’s Obligations

Export/Import clearance - Must assist with import clearance if requested.

Seller’s Obligations

Checking - Must pay for all checking operations like weighing/counting the goods, packaging, etc.

Buyer’s Obligations

Checking - No obligation.

Seller’s Obligations

Allocation of cost - The seller must pay for all costs until goods are delivered. This includes import formalities, transport, loading, documents, taxes, etc.

Buyer’s Obligations

Allocation of cost - Must pay from the time the goods are delivered. Must pay any additional charges from failing to notify the time or assisting the seller with import clearance.

Seller’s Obligations

Notices - Must notify the buyer when goods have been delivered.

Buyer’s Obligations

Notices - Must notify the seller of the destination and time.

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