Incoterms 2020

DDP Incoterm (Delivered Duty Paid) – Meaning, Risk & Costs

DDP (Delivered Duty Paid) under Incoterms 2020: where risk transfers, who pays for carriage, and seller and buyer obligations.

Rule: DDP – Delivered Duty Paid (named place of destination)
Transport mode: Any Mode of Transport
Insurance required: No
Export clearance: Seller
Import clearance: Seller
Main carriage: Seller

Delivered Duty Paid (DDP) represents the maximum obligation for the seller. The seller delivers the goods when they are placed at the disposal of the buyer, cleared for import, on the arriving means of transport, ready for unloading at the named place of destination.

The seller bears all costs and risks, including import duties and taxes. DDP should not be used if the seller cannot directly or indirectly obtain import clearance.

DDP is common in e-commerce and when sellers want to offer a complete "landed cost" to buyers. However, sellers must factor in the complexity and cost of import procedures.

When risk transfers under DDP

When goods are placed at buyer's disposal at destination

When costs transfer under DDP

At named place of destination, duty paid

Seller obligations under DDP

Deliver goods at destination, ready for unloading
Contract and pay for all carriage
Clear goods for export AND import
Pay all import duties, taxes, and charges
Bear all risks until destination
Provide all necessary documents

Buyer obligations under DDP

Unload goods from arriving vehicle
Take delivery at named place
Assist seller with import formalities if needed

Who is responsible for what under DDP

Export customs clearance: Seller
Import customs clearance: Seller
Loading: Seller
Main carriage: Seller
Unloading: Buyer
Delivery to destination: Seller

Common uses of DDP

E-commerce shipments
When buyer wants total landed cost
Sales to consumers
When seller has import capabilities

DDP is best for

Sellers with import expertise
E-commerce and B2C sales
When buyer cannot handle customs

Risks to watch with DDP

Seller handles import (complex in some countries)
VAT recovery may be difficult for seller
Maximum exposure for seller

Frequently asked questions

What does DDP mean in shipping?

DDP stands for Delivered Duty Paid. Delivered Duty Paid (DDP) represents the maximum obligation for the seller.

When does risk transfer under DDP?

When goods are placed at buyer's disposal at destination

Who pays for main carriage under DDP?

The seller pays for main carriage under DDP.

Who handles customs clearance under DDP?

Under DDP, the seller handles export clearance and the seller handles import clearance.

Is insurance required under DDP?

No. DDP does not require either party to buy insurance, though either may choose to arrange it.