DDP versus DDU | Which is better?

November 2, 2022

According to statistics, about 70% of China’s exports are traded under FOB terms, is there more convenient terms? Sure, AmirTool offer DDP and DDU option, friendly to importer, especially DDP terms, better way for new buyers who never sourcing from China.

DDP and DDU, two often used trade incoterms in international trade. However, many people do not understand them deeply enough, which leads to some troubles in the process of import and export. In this article, we will learn about DDP and DDU from the following aspects:

1> What are DDP and DDU meaning in shipping?

2> What’s the difference between DDP and DDU?

3> DDP or DDU, How to choose?

What Is DDP and DDU in Shipping?

DDP is short form for”Delivered Duty Paid”. A door to door shipping service, it means that the seller handle all relevant import procedures and directly sends goods to your appointed destination, such as your home, your company, your warehouse, etc.

All you need to do is wait for your goods at your warehouse and actively assist your seller so that he can obtain the import license or other official documents required and deal with import customs clearance for you.

DDU is also door-to-door. Though it is eliminated and replaced by DAP (Delivered at Place) in Incoterms 2010, it is still widely used in practice. The seller will also transport products to the final destination. They will help you deal with all importing procedures except going through customs clearance and paying import duties, while you have to handle these two things by yourself. And you should bear the additional costs and risks if you fail to timely pass customs clearance.

What’s the difference between DDP and DDU?

We can learn it from the picture, the main difference between DDP and DDU (DAP) is: under DDP, the seller deals with import customs clearance and pays customs duties, while under DDU(DAP), the seller leaves import duties to be paid by the buyer.

DDP or DDU, How to choose?

International shipping is a complex and important part of import and export. Take shipping from China as an example. It involves a lot of parts, such as sending from the seller’s warehouse to the Chinese port, shipping from the Chinese port to your country’s port, delivering from the port to your warehouse, dealing with import and export customs clearance, and paying import duties, etc.

If you are a new buyer and don’t have any shipping resources, or you are afraid of trouble and don’t want to worry about these things, then door-to-door shipping would be the best way for you. When your seller is willing and able to complete import declarations and pay duties, you can choose DDP.

When your seller is reluctant to do these things, you can choose DDU. In addition, if your funds are limited, instead of paying this fee upfront, you want to keep the money for other usage and pay when you receive the goods. Then DDU is also suitable for you.(sometimes DDP price even lower than DDU)

But if it is difficult and time-consuming for you to go through customs clearance in your country. It is not recommended to use DDU. You may not be able to complete the customs clearance procedures timely and smoothly. Then you have to pay additional costs for it and you can’t get your goods in time.

What’s more, you can ask your seller for CIF price and DDP price at the same time and choose a cheaper one. CIF price only covers the costs from the seller to the port in your country. You still have to pay the costs from the port to your warehouse and the import duties, which will be very high. Therefore, it is very likely that total costs under CIF will be more than DDP price. In this case, we would recommend you to use DDP, which can save you time, money, and energy.

When you are choosing which shipping terms to use, be sure to calculate all the costs from the seller to your hands. The costs are complicated and you’d better ask your seller, freight forwarder or sourcing agent directly.

The End

We hope that this article can give you a clear understanding of DDP/DDU(DAP). If you have any questions, you can leave us a comment.

We are AmirTool, leading workholding fixture manufacturer in China. We offer Erowa System 3R compatible tooling with competitive prices. Also, self-design fixture and mold making is also available. Just feel free to CONTACT US whenever you need support for CNC/EDM tooling. We can offer you good solutions to machining problems.