So, let’s delve into the myth that is DDP shipping. DDP stands for ‘delivered duty paid’. In the world of e-commerce, DDP shipping is extremely important, as it enables sellers to ship their orders globally. Many companies utilise DDP when shipping goods by air or sea freight. Essentially, DDP shipping is a shipping method that puts the onus on the seller in terms of responsibility. Until a buyer receives their purchase, the seller is responsible for any risk and fees associated with the shipping process.

Sellers will pay any taxes and fees liable, which although places extra pressure on the seller, it is a surefire way of encouraging consumers to buy items from your online store. The reason being? Well, a buyer isn’t going to want to place unnecessary risk on their order, and incur higher shipping costs or taxes – or worse still – being scammed. By entrusting a company that adopts DDP shipping, the buyer is protecting themselves from any potential financial hardship as a result of shipping costs.

Incoterms? Is that yet more jargon that needs debunking? You won’t generally find this term used much outside of fulfilment and shipping quarters, but essentially abbreviated terms like DDP are commonly referred to as Incoterms. Defined by the International Chamber of Commerce, Incoterms are vital components of global e-commerce. There are several that are used across the industry that all bear relevance and are of equal importance.

DDP and DDU – What’s the difference?

Although there is only one letter difference in terms of the acronym, there is a marked difference in both Incoterms and what they mean.

DDP – Delivered duty paid

DDU – Delivered duty unpaid

Essentially, the major difference between DDP and DDU is responsibility and the point in the journey where this is assumed by the buyer. DDP provides the most protection, and ensures the merchant takes the main bulk of responsibility. It provides a better customer experience, and is commonly used for cross-border shipping. Where DDU differs is that the fees and taxes are assumed by the buyer, once the shipment reaches the designated destination. Once the goods arrive at a particular destination, that’s when the responsibility is passed onto the buyer. Merchants have the option to increase costs and fees to the buyer in order to cover the costs of DDP.

Not to be outdone, we also have the Incoterm DAP. Although much less utilised than its counterparts, DAP stands for delivered at place. This means the seller assumes full responsibility for any costs and risks incurred for delivering items.

Some buyers may negotiate with sellers to transfer more responsibility to them.

DAP shipping can lead to delays, particularly during customs clearance, and any associated costs like dunnage or detention are typically the buyer’s responsibility.

For sellers, non-payment of import duties by the buyer can result in significant issues and potential loss of the cargo shipment.