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DDP Incoterm: Definition & Responsibilities

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.

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Based on the latest Incoterms® 2020 rules
Updated for Trade Practices
Includes real case studies
modern minimalist infographic illustrating the DDP Incoterm

Delivery

The seller arranges and covers full transportation to the agreed destination, including final unloading.

Customs & Duties

The seller manages both export and import customs clearance, handling all applicable duties and taxes.

Risk Transfer

Risk is transferred to the buyer only after the seller has fully completed their delivery obligations.

What is the DDP Incoterm? ( Definition)

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.

Seller's Cost & Risk (Until Final Delivery) Risk Transfers at Final Delivery Buyer's Cost & Risk (After Delivery)
Seller's Responsibility Zone Costs Covered
Step 1

Goods Preparation

  • • Proper Packaging
  • • Accurate Documentation
  • • Goods Ready at Seller’s Premises
Step 2

Shipping & Customs Clearance

  • • Arrange International Transport
  • • Handle Export & Import Customs
  • • Pay Duties & Taxes
Risk Transfer at Delivery

Final Delivery

  • • Deliver to Buyer’s Premises
  • • Confirm Unloading & Receipt
  • • Risk Passes to Buyer
Buyer's Zone Post-Delivery Actions

Unloading & Inspection

  • • Oversee Unloading Process
  • • Inspect Goods on Arrival
  • • Confirm Delivery Status

Final Acceptance

  • • Verify Goods Conformity
  • • Complete Acceptance Formalities
  • • Manage Post-Delivery Administration

Seller Pays For

  • Goods preparation & proper packaging
  • Full transportation including export & import customs clearance
  • Payment of duties, taxes & necessary import documentation
  • Final delivery to buyer’s premises

Buyer Pays For

  • Unloading & receipt of goods at the destination
  • Inspection and final acceptance of delivery
  • Any additional post-delivery handling or storage fees

Want to learn more?

Compare DDP with other Incoterms to understand the key differences in seller and buyer responsibilities.

DDP vs DAP

DDP Incoterm: Seller vs. Buyer Responsibilities

Understanding your obligations under DDP (Delivered Duty Paid) terms

Seller's Key Obligations

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.

Buyer's Key Obligations

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
Packaging, Marking & Labeling

Prepare goods for shipment

Shipping & Customs Documentation

Export & import paperwork

Main Carriage

Transport to destination

Insurance Coverage (Optional)

Seller may insure shipment

Optional
Import Customs Clearance & Duties

Customs, taxes, permits

Final Delivery & Unloading

Delivered to buyer’s premises

Additional Costs

Extra fees & charges

What Happens if the Goods Are Damaged During Transport?

Important information about risk transfer and liability under DDP terms

Risk Transfer Point

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.

Insurance Protection

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.

Claim Process

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.

Required Documentation

  • Commercial Invoice, Packing List & Certificate of Delivery
  • Damage Report (if applicable)

Time Limitations

  • Report damage within 3 days of final delivery (may vary with policy)
  • File claim within 30 days (subject to insurer's conditions)
Compare Incoterms

DDP vs CIF, DAP, FCA & EXW: Key Differences

Responsibility

DDP

DAP

CIF

FCA

EXW

Main Transport
Seller arranges door-to-door delivery
Seller delivers at destination
Seller to port of destination
Buyer arranges transport from carrier handover
Buyer arranges pickup at origin
Insurance
Seller (optional)
Not provided
Seller (Marine only)
Buyer arranges insurance from handover
Buyer responsible
Risk Transfer
Upon final delivery & acceptance
Upon delivery
At loading port
At carrier handover
Immediately upon pickup
Export Clearance
Seller
Seller
Seller
Seller
Buyer*
Import Clearance
Seller
Buyer
Buyer
Buyer
Buyer
Duties & Taxes
Seller
Buyer
Buyer
Buyer
Buyer
Typical Usage
Best when the seller manages door-to-door delivery with full customs clearance.
Ideal when the seller handles delivery to a designated destination.
Suitable for sea freight with seller-provided marine insurance.
Ideal when the seller’s responsibility ends at carrier handover.
Suitable when the buyer assumes all responsibilities from pickup at the seller’s premises.

When and why should you choose DDP over CIF, DAP or FCA (instead of EXW)?

What is the key difference between DDP and CIF?

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.

When should I choose DDP instead of FCA?

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.

What benefits does DDP offer for multimodal transport?

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.

How are customs responsibilities allocated under DDP?

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.

What additional insurance options are available under DDP?

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.

What are common pitfalls when using DDP terms?

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.

What documentation is required for a DDP shipment?

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.

How can disputes regarding DDP terms be resolved?

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.