A comprehensive guide to understanding Delivered Duty Paid (DDP) Incoterm: roles, responsibilities, and risk transfer once the seller has fulfilled all delivery obligations including transportation, customs clearance, and payment of duties and taxes.
The seller arranges and covers full transportation to the agreed destination, including final unloading.
The seller manages both export and import customs clearance, handling all applicable duties and taxes.
Risk is transferred to the buyer only after the seller has fully completed their delivery obligations.
DDP means that the seller is responsible for delivering the goods to the buyer’s premises, cleared for import, including all duties, taxes, and customs procedures.
DDP (Delivered Duty Paid) is an international trade term in which the seller assumes all risks and costs involved in delivering the goods to the buyer's specified location. This includes transportation, export and import customs clearance, payment of duties and taxes, and any additional charges until the goods are delivered and ready for unloading. Under DDP, the seller’s responsibility is maximized, ensuring that the buyer receives the goods without needing to handle shipping logistics or clearance procedures.
Compare DDP with other Incoterms to understand the key differences in seller and buyer responsibilities.
Understanding your obligations under DDP (Delivered Duty Paid) terms
The seller is responsible for the entire delivery process—from packaging and shipping to handling customs clearance and final delivery at the buyer’s premises.
The buyer’s role is limited to receiving the goods. Responsibility transfers only after the seller has fully completed all delivery obligations.
| Responsibility | Seller | Buyer |
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Packaging, Marking & Labeling
Prepare goods for shipment Seller must ensure that goods are properly packaged, marked, and labeled in accordance with international shipping standards. |
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Shipping & Customs Documentation
Export & import paperwork Seller provides all necessary documents—including commercial invoice, packing list—and completes both export and import customs clearance. |
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Main Carriage
Transport to destination Seller arranges and pays for the international transport of the goods right up to the buyer’s designated delivery location. |
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Insurance Coverage (Optional)
Seller may insure shipment Seller may choose to secure insurance for the goods during transit, though it is not a mandatory requirement under DDP. |
Optional | |
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Import Customs Clearance & Duties
Customs, taxes, permits Seller handles all import customs procedures, including the payment of duties, taxes, and acquisition of any necessary import permits. |
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Final Delivery & Unloading
Delivered to buyer’s premises Seller is responsible for delivering the goods to the buyer’s location, including unloading and handling until the goods are received. |
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Additional Costs
Extra fees & charges Seller covers any extra charges incurred beyond the agreed DDP obligations. |
Important information about risk transfer and liability under DDP terms
Under DDP, the seller retains all risks until the goods are delivered and accepted at the buyer’s premises. This means any damage incurred during transit is the seller’s responsibility.
Since the seller is liable for the goods until final delivery under DDP, it is crucial that the seller secures comprehensive insurance coverage to protect against any potential damage during transit.
In the event of damage during transit, the seller must promptly file a claim with their insurance provider. All necessary documentation should be provided to support the claim before the goods are accepted by the buyer.
Under DDP, the seller is responsible for delivering the goods to the buyer’s premises—including handling export and import customs clearance, duties, and taxes—whereas under CIF, the seller’s obligation ends at the port of destination with limited insurance coverage.
Choose DDP when you prefer the seller to manage the entire delivery process—including customs clearance, payment of duties, and final door-to-door delivery—whereas FCA requires you to arrange the main carriage and handle import procedures yourself.
DDP ensures a seamless multimodal transport experience by having the seller coordinate all aspects—from ground to air or sea transport—handle customs clearance, and deliver the goods directly to your door, reducing logistical complexity.
Under DDP, the seller handles both export and import customs clearance, including all duties and taxes, ensuring that the goods are delivered ready for unloading at the buyer’s premises.
With DDP, the seller generally secures insurance for the entire transit process. However, insurance may be optional or subject to extra charges depending on your contract, so review the terms carefully.
Common pitfalls include delays in customs clearance, unforeseen import duties or taxes, and miscommunication regarding delivery conditions. It is crucial to have clear contractual terms and a reliable seller to avoid these issues.
Typically, the seller provides a commercial invoice, packing list, export and import customs documents, and a certificate of delivery to confirm that the goods have been delivered to the buyer’s premises.
Disputes under DDP typically focus on delivery completeness, customs clearance accuracy, and proper payment of duties and taxes. These issues are usually resolved through negotiation, mediation, or arbitration as specified in the contract.