Incoterm DDP explained

What is Incoterm DDP?
DDP is a very versatile Incoterm. In fact, this Incoterm can be used for any form of transportation. In addition, this Incoterm is suitable if the seller likes to be in control. The seller determines the entire transport process. If you agree on DDP, you as the seller are responsible for the transport of the goods. If, as a buyer, you do not want to worry about arranging the transport, DDP is also a suitable Incoterm.

Incoterm DDP meaning
Literally, DDP means "Delivered Duty Paid. With the Incoterm DDP, the seller bears all obligations concerning the transport and the risk of transporting the goods. It does not matter what kind of transport the goods are carried with; all modes are possible. The seller ensures that the goods are delivered on the agreed date (unloaded) to the agreed destination.

DDP transport
Incoterm DDP can be used regardless of the means of transport. The seller chooses the carrier and arranges everything for transportation. The seller ensures that the goods are delivered to the place agreed upon with the buyer. At this place, the seller makes the goods available without unloading them. The place of delivery can also be at an agreed upon person's house. It is important to clearly indicate the place of delivery. This is because this is where the risk passes from seller to buyer.

Incoterm DDP costs
With Incoterm DDP, most costs are paid by the seller. The seller pays all transportation-related costs until the goods are unloaded at the destination. This includes export and import costs. Any insurance is paid by the seller as well as taxes and duties. The buyer is responsible for many of the costs incurred in unloading the goods. If the goods have to be further transported later, these costs are also borne by the buyer.

Seller's Obligations under DDP
The risk of damage and loss of the goods is borne by the seller throughout transportation. Only once the goods have arrived at their destination does the risk pass from seller to buyer. In addition, the seller is obligated to arrange the entire transportation process. This includes arranging customs formalities, import and export licenses, taxes and any insurance. Transport insurance is not mandatory with DDP. Until the goods are unloaded, the selling party is responsible for everything that happens to the goods.

Buyer obligations with DDP
With DDP, the buyer has relatively few obligations. As a buyer, you obviously pay for the goods, but you do not have to pay for the transport. If the goods have to be transported beyond the agreed destination, you do pay for these costs. Unloading the goods is also the buyer's responsibility. The risk of damage or loss of the goods goes to the buyer once the goods, not unloaded, have arrived at their destination.

Incoterm DDP vs. DAP
Incoterm DDP is very similar to Incoterm DAP, and many of the terms are very similar so they are often confused with each other. As explained here, with DDP, the seller is fully responsible for the shipping process and all associated costs. This includes the cost of customs formalities and taxes. Under DAP, the seller is also responsible for the transportation process, but not for the customs formalities and taxes for importing the goods. Under DAP, this is the buyer's responsibility. With both Incoterms, the risk of damage or loss goes to the buyer from the time the goods are ready to be unloaded by the buying party. Also, both Incoterms are applicable to any mode of transportation.

Sea freight or air freight shipments with customs obligation?
Global shipments and shipments within Europe to/from non-EU countries are subject to customs obligations. What measures do you need to take and what documents are required? With the knowledge and experience of our specialists in the Rotra customs department, we are able to provide solutions for all your customs obligations that fit your logistics process while you focus on your own core business. For more info contact us directly.