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Do you understand the differences between DDP, DDU, and DAP in Freight Classroom?
DDP and DDU, two trade terms, are often used in the import and export of goods, and many exporters do not have a deep understanding of these trade terms, so they often encounter unnecessary troubles in the process of exporting goods. So, what exactly are DDP and DDU, and what are the differences between these two trade terms? Here is a detailed introduction for everyone.
What is DDU?
The English name for DDU is "Delivered Duty Unpaid", which means "Delivered Duty Unpaid (Designated Destination)". This trade term refers to the delivery of goods by exporters and importers at a certain location in the importing country during the actual work process, where the exporter must bear all costs and risks of transporting the goods to the designated location, as well as the costs and risks of handling customs procedures. However, it should be noted that tariffs, taxes, and other official fees required for importing goods are not included here. Importers need to handle additional costs and risks caused by the failure to complete the import clearance process for goods in a timely manner. Generally speaking, the cost breakdown involved in DDU is quite complicated. If this trade term is used, importers must ask the freight forwarder to leave a written document and stamp it when confirming the price, in order to avoid disputes in the future.
What is DDP?
DDP stands for "Delivered Duty Paid" in English, meaning "Delivered Duty Paid (Designated Destination)". This delivery method refers to the exporter completing the import customs clearance procedures at the designated destination of both the import and export parties before handing over the goods to the importer. Under this trade term, exporters are responsible for all risks associated with transporting goods to the designated destination, as well as handling customs clearance procedures at the destination port, paying taxes, fees, and other charges. It can be said that under this trade term, the seller bears the greatest responsibility. If the seller is unable to directly or indirectly obtain an import license, then this term should still be used with caution.
What are the differences between DDU and DDP?
The biggest difference between DDU and DDP lies in who bears the risks and costs during the import clearance process of goods at the destination port. If the exporter has the ability to complete import customs clearance, then DDP can be chosen. If the exporter does not have the ability to handle relevant matters, or is unwilling to handle import procedures, bear risks and costs, then DDU terminology should be used. The above is an introduction to some basic definitions and differences between DDU and DDP. In the actual work process, exporters must choose appropriate trade terms according to their actual work needs in order to ensure the normal completion of their work.
How to calculate DDU and DDP fees:
Fob amount Add: 1. All local charges at the export port. 2. The ocean freight (whether positive or negative) is the CIF amount. If DDP is required, add the local charges at the destination port. If DDP is required, add the customs duties at the destination port.
The difference between DAP and DDU:
DAP (Delivered at Place) is a new term in the 2010 Incoterms, while DDU is a term in the 2000 Incoterms and no longer exists in 2010. The terms of DAP are as follows: Delivery at destination. This term applies to one or more modes of transportation and refers to the seller's delivery when the goods ready for unloading on the arriving transport vehicle are placed at the buyer's disposal at the designated destination. The seller bears all risks of transporting the goods to the designated location. It is best for the parties to clearly specify the location within the agreed destination, as all risks to that location are borne by the seller.
What is DDU?
The English name for DDU is "Delivered Duty Unpaid", which means "Delivered Duty Unpaid (Designated Destination)". This trade term refers to the delivery of goods by exporters and importers at a certain location in the importing country during the actual work process, where the exporter must bear all costs and risks of transporting the goods to the designated location, as well as the costs and risks of handling customs procedures. However, it should be noted that tariffs, taxes, and other official fees required for importing goods are not included here. Importers need to handle additional costs and risks caused by the failure to complete the import clearance process for goods in a timely manner. Generally speaking, the cost breakdown involved in DDU is quite complicated. If this trade term is used, importers must ask the freight forwarder to leave a written document and stamp it when confirming the price, in order to avoid disputes in the future.
What is DDP?
DDP stands for "Delivered Duty Paid" in English, meaning "Delivered Duty Paid (Designated Destination)". This delivery method refers to the exporter completing the import customs clearance procedures at the designated destination of both the import and export parties before handing over the goods to the importer. Under this trade term, exporters are responsible for all risks associated with transporting goods to the designated destination, as well as handling customs clearance procedures at the destination port, paying taxes, fees, and other charges. It can be said that under this trade term, the seller bears the greatest responsibility. If the seller is unable to directly or indirectly obtain an import license, then this term should still be used with caution.
What are the differences between DDU and DDP?
The biggest difference between DDU and DDP lies in who bears the risks and costs during the import clearance process of goods at the destination port. If the exporter has the ability to complete import customs clearance, then DDP can be chosen. If the exporter does not have the ability to handle relevant matters, or is unwilling to handle import procedures, bear risks and costs, then DDU terminology should be used. The above is an introduction to some basic definitions and differences between DDU and DDP. In the actual work process, exporters must choose appropriate trade terms according to their actual work needs in order to ensure the normal completion of their work.
How to calculate DDU and DDP fees:
Fob amount Add: 1. All local charges at the export port. 2. The ocean freight (whether positive or negative) is the CIF amount. If DDP is required, add the local charges at the destination port. If DDP is required, add the customs duties at the destination port.
The difference between DAP and DDU:
DAP (Delivered at Place) is a new term in the 2010 Incoterms, while DDU is a term in the 2000 Incoterms and no longer exists in 2010. The terms of DAP are as follows: Delivery at destination. This term applies to one or more modes of transportation and refers to the seller's delivery when the goods ready for unloading on the arriving transport vehicle are placed at the buyer's disposal at the designated destination. The seller bears all risks of transporting the goods to the designated location. It is best for the parties to clearly specify the location within the agreed destination, as all risks to that location are borne by the seller.
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