Explaining DDP in simple language under Incoterms 2020

DDP – Delivered Duty Paid (named place)

DDP means Delivered Duty Paid.

The exporters and importers may mention detailed named place under their Sale contract by mentioning the year of Incoterms version to avoid disputes on delivery of goods.  Inco Terms DAP is used for all modes of transport – Sea, Air and Land, as it is one of the delivery terms categorized as Omni Modal Inco terms.

Under Inco terms DDP, Seller bears the responsibility of risks and costs for packaging the goods, pre carriage,  export documentation, export customs clearance, port handling, main carriage and import customs clearance, import duty and taxes if any and on carriage at the named place agreed with buyer.  The buyer is responsible for the risk and cost of unloading goods under DDP terms of delivery.

Under DDP terms, the risks and costs transfer from Seller to buyer when Seller arranges the goods available for unloading at the named place agreed.

Under DDP terms of delivery, the complete control over pre carriage, main carriage and on carriage of goods is with the Exporter under International trade.  So the exporter is the in charge of carrier selection and documentation.  However, the profit margin of seller can be assessed, once after completion of all the process of delivering goods at named location of buyer’s place.  The buyer is depended upon the seller to get the data related to shipment.

The seller takes all risks and costs except unloading of cargo at destination named place under DDP terms.    So Under DDP terms, sound  knowledge and experience at importer’s country on import customs clearance process especially the import regulations and tariff rates is required for  the Seller.  A good knowledge of transporting system at importer’s country is also essential for a seller, or his reliable freight forwarder or his agent to contract DDP terms in export import business.

Higher risk higher invoice value

Who arranges Insurance under DDP terms?   Since DDP terms does not state about Insurance, neither the party is responsible to arrange insurance under Incoterms.  However, either the buyer or the seller may arrange insurance as per their understanding and mutual agreement as per their sale contract.Click here to read about Ex-works, FOB,FCA,CPT,CIP,DAP,DPU,DDP,FAS,CFR and CIF  under INCO TERMMS 2020

  DDP – Delivered Duty Paid (named Place)

 The above details are about DDP delivery rules under Inco terms 2020.  You may share your experience and knowledge about DDP - Delivered Duty Paid below:

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