DDP vs. DDU – Incoterms

Delivered Duty Unpaid (DDU)

DDU is an incoterm* that specifies that the seller is responsible for delivering the goods to the buyer, but the buyer is responsible for paying any customs duties and taxes. 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. 

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)

Delivered Duty Paid (DDP) is an incoterm that specifies that the seller is responsible for delivering the goods to the buyer, including paying any customs duties and taxes. The seller assumes all of the costs and risks associated with delivering the goods to the buyer, including any potential delays or issues with customs duties and taxes.

For the buyer, DDP can be a convenient solution, as they do not have to worry about paying customs duties and taxes or dealing with any potential issues related to these costs. This might also mean the seller embeds these customs charges into the price of the product. 

Key Differences Between DDP vs. DDU

In summary, DDP (Delivered Duty Paid) means the seller is responsible for all duties, taxes, and additional costs, while DDU (Delivered Duty Unpaid) means the buyer is responsible for these expenses. DDP also places more responsibility on the seller for customs clearance and paperwork, while DDU places this responsibility on the buyer. Additionally, under DDP the seller is responsible for any loss or damage to the goods during transportation until they are delivered to the buyer, while under DDU the buyer assumes this risk. 

View all 11 Incoterms

Our experienced team is here to help you navigate the complex world of international trade and select the best incoterm to suit your specific needs. Contact us today and let us help you streamline your logistics. 

*Incoterms are published by International Chamber of Commerce.

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