DDP Shipping: Learn about the benefits

Today we are going to talk about Inter Delivered Duty Paid. Follow along!

DDP shipping defines the greatest liability for the seller, since it is the only term of broad liability for the seller. It means that the seller delivers the goods to the final destination paying for all costs, including duties and taxes, up to the final destination.

This is an Incoterm for use in any mode of transport and requires the seller to clear all customs in the country of origin and destination, i.e. it is necessary to pay taxes and duties in both the country of export and import.

In addition, the seller has to promote delivery to the agreed final destination, whatever it may be, at a port, airport or border, and even at the buyer's premises. However, before hiring the DDP shipping Incoterm, it is essential that buyer and seller understand whether the destination country of the goods allows this operation.

This is because in Brazil, for example, it is not allowed to import via DDP shipping, since Brazilian standards, rules and laws do not allow the foreigner to collect the tax to be offered here. So DDP shipping is forbidden in import operations in Brazil.

DDP Submission: What is Incoterm?

When we talk about Incoterm, we are referring to an international term of trade that was created by the International Chamber of Commerce. In practice, the Incoterm establishes two things: the responsibility and the cost from one point of loading to the other.

You know that phrase "where one's right begins, another's right ends?' That's basically it! So, we can say that DDP shipping is a model Incoterm that should be defined at the beginning of the negotiation. 

In the DDP Incoterm the exporter is responsible for delivering the cargo from origin to destination including the last stretch in national territory.

DDP Submission: What is it?

Objectively speaking, DDP shipping is an option to charge the carrier and Incoterm. It is usually done for the purpose of preventing the consumer from being surprised with charges upon delivery by the carrier in the importing country.

In DDP shipping the seller assumes all responsibilities and risks of transportation from origin to the destination address stipulated by the buyer. The seller must then arrange all clearance and duty payments, both in the country of origin for export and in the country of destination for import.

And while this modality exposes the seller to greater risks, it is the one that adds most value to the export, since it provides more convenience and confidence to the consumer. Furthermore, it is interesting to remember that DDP shipping can be used in any mode of transport.

DDP shipping: Why is it better?

The best benefit generated by DDP shipping is the customer experience it provides. And why is that? The answer is simple: because this modality allows for greater transparency in the final value of the product and prevents unwanted surprises for the consumer in the future.

And what surprises would these be? Hiring other modalities, not being fully aware of the tax amounts, as well as the import taxes, and after having made the purchase you are asked to pay these taxes by customs.

Imagine how unpleasant and inconvenient it is: your customer buys from you, makes the necessary payments, and weeks later when he is sure that the whole process has been completed and all that is needed is to receive the product, he finds the carrier charging him for all the release fees that could have been paid before and in a single payment. 

Not a good situation, is it? Especially since in these cases the fees for releasing the products cost almost as much, or more, than the packages themselves. 

Thus, in an extremely competitive universe, investing in services that aim to improve the consumer experience is one of the key points to make your business even more reliable and respected.

Want to learn more about DDP shipping and try it out? Visit our website and contact us!