DDP vs. DDU – Incoterms
When shipping products to another country, the first question is who should pay for duties and taxes (D&T). Learn about the difference between DDP and DDU.
Delivered Duty Unpaid (DDU)
The advantage having the recipient pay customs duties and taxes is that the exporting company (seller) doesn’t have to pay upfront charges and rather the buyer takes on those costs. This is called Delivered Duty Unpaid (DDU) or Delivered-at-Place (DAP).
The challenge with the DDU approach is that if the recipient is not on file with customs already, there can be a lack of communication leading to customs delays. Customs will not release a shipment until they have confirmed the billing information of the recipient is on file. They buyer can also encounter surprise fees that they did not anticipate.
Delivered Duty Paid (DDP)
Another option is to send the shipment as Delivered Duty Paid (DDP) which means the seller covers all duties, taxes, and any other import fees upfront before the product crosses the border.
The seller or exporting company covers all financial responsibilities of the shipment costs up until the products have been delivered to the buyer. This might mean the seller embeds these charges into the price of the product.
DDP and DDU are Incoterms, published by International Chamber of Commerce.
For reagents that need to remain cold or frozen that are shipped internationally we always recommends shipping DDP to avoid unnecessary customs delays and temperature excursions. Learn more about our customs brokerage services.