DDP DELIVERY TERM - DELIVERY DUTY PAID

DELIVED AT TERMINAL

DDP Delivery Term

DDP / Delivery Duty Paid - Customs Duties Paid as Delivery, term

DDP Delivery term is, one of the best safety way to make an international trade for importer companies cause all responsibilities are on exporter's side till the goods reach to importer's facility.

As a note, incoterms including 11 different delivery methods and DDP is the less using delivery term in D group.

What is DDP?

In the form of delivery of DDP, the exporter company should organize all steps of delivery.  At first they should load the goods on veichle or container at their factory, then organize the internal transportation if its a seaway shipment, handle the port operations (if its a seaway shipment), also handle the land shipment if its a truck shipment, handle the customs process at their customs.

In second step, exporter's carrier carry the goods at, importer's country. In this step, exporter company also should handle the customs operations in importer's country, pay the customs charges, customs duties and also local tax. Finally, exporter's carrier unload the goods in buyer's facility

For example, think that the exporter company based in istanbul city in Turkey. The buyer company is based in London UK.  If the delivery term in the contract or in the proforma invoice is specified as DDP London, the seller ie exporter company should handle all logistic steps and also handle all customs operation and pay all charges, duties and taxex till the goods reach to buyer's facility in London.

What is the Difference between DAP and DDP

Both incoterm types DAP and DDP delivery deliveries the goods till the destination point. The main difference is DDP include all costs; all costs to be paid to the destination, include customs duties and local taxes, all are the seller's responsibility. However, DAP and also DAT delivery types dont include customs  duties and local taxes.

As an example; Chinese based X company sells its goods to Germany based Y company with DDP terms. It means that X company have to pay %5,5 customs duty and also %18 local tax for these goods. In DDP terms, buyer company do nothing till the goods reach to their address.

For example, if a forklift is hired to lower the load, it must be organized by the seller or pay the cost. If the DAP is in the form of delivery, the transportation vehicle reaches the specified address but it is the responsibility of the buyer, ie the importer, to lower the load from the vehicle.

DDP Delivery Term Insurance Obligation 

In the form of DDP transport, insurance is the seller's obligation. seller's  insurance covering the inland transportation, international shipment and also inland transportation at destination country. The insurance obligation finish when the goods reach to detination point.

DDP "Delivered at Terminal" How to Calculate Price

When calculating the DDP price, the vendor, ie the distributor, calculates the profit share on the product cost, packaging costs, factory loading, customs costs, transportation insurance, freight charges, customs charges in the buyer's country, customs duties and local taxes. In this way the DDP price is determined.


DDP Price Account: Product cost + profit share + packaging costs + loading in factory + inland transportation + port charges + customs expenses + freight cost + unloading expenses + inland port charges (if agreed) transportation at destination country + customs duty + local tax

DDP Delivery Term: How it works

DDP delivery requires that all shipment process should organized by the seller. So all shipping costs belong to the seller ie exporter company. The seller ie exporter company also should organize the shipping according to the buyer's ie importer request. It means both party should agree on which type of vehicle to be used during the transport phase, for example if the buyer company request truck shipment instead of seaway shipment, they should agree  and note it on their agreement orr purchase order and proforma invoices. If buyer company have any deadline, they should mention it on purchaising period and get the confirmation from the seller company. Cause delivery on seller's side. 

DDP delivery term using both ship and truck deliveries. The exporter ie "seller" company organize the truck or vessel shipment and handle the shipment organization till the goods reach to agreed delivery point. Delivery address could be the buyer's facility or any other point in buyer's country. 

DDP delivery terms also using for some overseas shipments using both truck & vessel. In this scenerio; The truck or semi-trailer pick up the goods from the buyer's facility and carried with ro-ro ship to the destination port. The truck continue to the road when ro-ro ship unload the truck at destination port. Finally its reach to finall adress and unload the container to the buyer's facility.

DDP Delivery In the form of Buyer and Seller's Responsibilities

Seller (Exporter) responsibilities DDP delivery Term
  • The seller load the container in his own facilities, 
  • The seller should arrange the international shipment
  • Organizes the inland transportation to reach container to harbour, 
  • Ensures that the cargo is loaded to the ship on time 
  • Complete the customs clearence
  • International shipment costs belong to the seller.
  • Unloading expenses
  • Inland transportation from destination port to agreed place in destination country
  • The seller company should prepare the insurance covering all risks
  • The buyer's responsibilities start when the goods reach to destination port/place
  • Customs clearance at destination point (in buyer's contry)
Buyer (Importer)
  • Buyer company have no responsibilities

DELIVED AT TERMINAL


DDP "Delivered at terminal" Delivery and Distribution of Responsibility

The seller ie exporter company  have to organize all shipment steps and also should prepare the shipping and customs documents as: commercial invoce, weight (packing) list, certificate of origin, bill of lading (or CMR) and if any other requested documents. 

Bill of lading, airway bill and CMR are transport certificates, which represent the owner of the goods and many information related with the customs process. These documents prepare by the carrier company but they get the datas from the exporter company. If any information missing or wrong, the importer company cant use these documents in destination customs. So its better to send the draft to importer company for checking before the original document created.

The seller (Exporter) company should send all exporting documents including; "invoice, packing list, certificate of origin, bill of lading and any other requested document" to the buyer company with in the time limit of transportation.

DDP delivery term include all steps till the goods reach to buyer's facility. So its better to mention the exact address on proforma invoice and purchase order as:  "DDP ....address on .... city" 

DDP Delivery Term :  Responsibilities for Both Side


details DDPCostsRisks
PackagingSeller ie exporterSeller ie exporter
Internal shipment (to the harbour)Seller ie exporterSeller ie exporter
Customs clearenceSeller ie exporterSeller ie exporter
Port Loading (handling charges)Seller ie exporterSeller ie exporter
Shipment (main shipment charges)Seller ie exporterSeller ie exporter
InsuranceBuyer ie importerBuyer ie importer
Port Unloading at destination (handling)Seller ie exporterSeller ie exporter
Customs clearence at destinationSeller ie exporterSeller ie exporter
Internal shipment at destination ( (www.ihracat.co)Seller ie exporterSeller ie exporter

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usatradevisa: DDP DELIVERY TERM - DELIVERY DUTY PAID
DDP DELIVERY TERM - DELIVERY DUTY PAID
DDP Delivery term is, one of the best safety way to make an international trade for importer companies cause all responsibilities are on exporter's side till the goods reach to importer's facility.
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