Delivered Duty Paid (DDP)

Published May 8, 2023

Definition of Delivered Duty Paid (DDP)

Delivered Duty Paid (DDP) is a trade term that refers to a delivery agreement between a seller and a buyer. In this agreement, the seller assumes full responsibility for the delivery of goods to the buyer’s specified destination, which includes the payment of all required duties and taxes. This means that the seller takes care of every aspect of the shipment, including the customs clearance process.

Example

To illustrate the concept of Delivered Duty Paid, let’s imagine a scenario where a Chinese company is selling a shipment of electronics to a German company. The Chinese seller agrees to ship the goods to the German buyer’s facility in Berlin using DDP terms. This means that the Chinese seller is responsible for arranging the transport of goods from China to Berlin, including all relevant documentation, payment of tariffs, taxes, and other fees associated with customs clearance.

Upon arrival, the German buyer signs off and receives the goods in Berlin without having to worry about customs clearance or any other related issues. The seller has arranged everything to ensure that the shipment arrived at its destination without any delays or problems. This way, the buyer experiences a hassle-free transaction and is satisfied with the delivery of the goods.

Why Delivered Duty Paid Matters

Delivered Duty Paid is important in international trade, especially for buyers who are dealing with foreign sellers. By agreeing on DDP terms, buyers can have greater control over the transport process, avoid paying additional fees and charges, and have a better understanding of the total cost of the shipment. It also makes it easier for buyers to track shipments and ensure that they receive the goods on time and in good condition.

For sellers, DDP can help to build trust with buyers and simplify the transportation process, which can improve customer satisfaction and lead to repeat business.