DDP and CIP under Inco terms

 

  

Compare CIP and DDP from Incoterms 2020 point of view

Delivered Duty Paid Vs. Carriage and Insurance Paid to are two of Inco terms  among 11 delivery rules designed by ICC. 

Under CIP, the Seller is liable to arrange minimum insurance against movement of goods whereas under DDP, neither buyer nor seller is responsible to arrange Insurance, which may separately discuss out of Inco terms rules 2020. 

CIP is widely used to move goods from Warehouse to Warehouse, movement of LCL cargo, shipments under break bulk etc. especially to Dry ports and intermediary ports. CIP modes are used widely used for the shipments by air also.     

Under DDP delivery rules, the seller transfers risks and costs to buyer when goods reached for unloading at the destination delivery named place at buyer’s side.  Under CIP deliver terms, the cost of movement of goods  transfers from seller to buyer when goods reached at the named place at the disposal of buyer to unload and the risks of movement of goods transfers from seller to buyer immediately after loading the goods  in to carrier at Seller’s side. So under DDP, the named place is the ‘delivered place’ where as under CIP, the named place is not the ‘delivered place’.

Under DDP, the Seller is responsible for import customs clearance and duties and taxes if any at buyer’s country.  However under CIP, the buyer is responsible to undertake import customs clearance by paying any duties or taxes involved.

 

CIP – Carriage and Insurance Paid
            (named Place)

 

 

DDP – Delivered Duty Paid (named Place)

 

 

Costs

Risks

 

 

Costs

Risks

Warehouse services

Seller

Seller

 

Warehouse services

Seller

Seller

Marking and labeling

Seller

Seller

 

Marking and labeling

Seller

Seller

Packing of Goods

Seller

Seller                                   

 

Packing of Goods

Seller

Seller                                   

Loading at Seller’s premises

Seller

Seller

 

Loading at Seller’s premises

Seller

Seller

Transportation from Seller’s

 premises to Load port

Seller

Seller

 

Transportation from Seller’s

premises to Load port

Seller

Seller

Unloading at Loading Port

Seller

Seller

 

Unloading at Loading Port

Seller

Seller

Loading to Vessel/Aircraft

Seller

Seller

 

Loading to Vessel/Aircraft

Seller

Seller

Export documentation

Seller

Seller

 

Export documentation

Seller

Seller

Export Customs Clearance

Seller

Seller

 

Export Customs Clearance

Seller

Seller

Export Taxes and duties (if any)

Seller

Seller

 

Export Taxes and duties (if any)

Seller

Seller

Handling  at Load Port

Seller

Seller

 

Handling  at Load Port

Seller

Seller

Main Carriage

(Ocean Freight/Airfreight)

Seller

Buyer

 

Main Carriage

(Ocean Freight/Airfreight)

Seller

Seller

Import Customs Clearance

Buyer

Buyer

 

Import Customs Clearance

Seller

Seller

Import Documentation

Buyer

Buyer

 

Import Documentation

Seller

Seller

Import Taxes and Duties (if any)

Buyer

Buyer

 

Import Taxes and Duties (if any)

Seller

Seller

Transportation from named place to final destination

Buyer

Buyer

 

Transportation from destination

port to named place

Seller

Seller

Unloading at named place

Buyer

Buyer

 

Unloading at named place

Buyer

Buyer

Insurance

Seller

NA

 

 

               

 

You may read about CIP and DDP written individually by easily explaining below to click:

 

DDP  Delivered Duty Paid

 

CIP  Carriage and Insurance Paid To

 

The above information explains about the difference between CIP and DDP.  You may share below your thoughts to add up this post about the comparison between DDP and CIP under Incoterms 2020.

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