What is Delivered Duty Paid (DDP)?
An Incoterms® rule, applicable to any form or forms of transport (air, ocean, ground, or multimodal), under which the seller is responsible for all risk and costs associated with shipping and delivering goods to a named place of destination (often the buyer’s place of business), including export clearance, transport costs and – significantly -- import clearances. Risk and costs transfer from the seller to the buyer when the seller makes the goods available, ready for unloading, at the named place of destination.
Though DDP may be seem to be an attractive option for buyers, as it places all of the burden of shipping, importing and delivery on the seller, keep in mind that sellers may increase their prices to cover the potential additional costs of using this method.
Sellers should be particularly cautious in agreeing to a DDP sale, as they may not be in a position to obtain import clearances in the destination country. Some countries, for example, require entities conducting import formalities to have a local presence in the country. Where a seller anticipates difficulty in carrying out import formalities, the parties may be better off choosing DAP or DPU.
Note:
When an Incoterms® rule is included in a contract of sale, it creates legal obligations for the buyer and seller, which can have costly implications. Therefore, it is important that traders read and understand the precise wording of the Incoterms® rules carefully and choose the rule to include in their sale contract thoughtfully. For additional information and resources on the Incoterm® rules and to purchase the full text of the Incoterms® 2020 rules, visit the ICC website.
Related Terms
Delivered at Place Unloaded (DPU)
Related FAQs
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