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Do you know the difference between DDU and DDP?

by:VIPUTRANS     2020-09-03
When we receive an inquiry from a customer, we need to talk about trade terms to the customer. Often customers will tell us that they require DDP or DDU. At this time, to be honest, the first time I saw it, I was confused. Usually, many customers tell me about CIF or FOB. When they first came into contact, they quietly consulted the old employees of the company. The old staff asked me to ask the freight forwarder for the specific freight. At that time, the freight forwarder asked me to give me specific information: the size, weight, total number of boxes, customs code of the goods, the value of the goods, and the specific foreign delivery address. At that time, I felt that DDU was super troublesome, but after I understood it, I felt that it was actually the same thing. Today we will explore the specific content of DDU and DDP together.

DDU (Delivered Duty Unpaid) means that the seller delivers the goods to the buyer at the designated destination for disposal without going through import procedures or unloading the goods from the delivery vehicle, which means the delivery is completed. The seller shall bear all risks and costs of transporting the goods to the designated destination, excluding any taxes and fees payable for imports in the destination country when customs formalities are required (including the responsibilities and risks of customs formalities, and the payment of handling fees , Duties, taxes and other fees).

  In DDU, the seller needs to bear a lot of risks and costs, including shipboard risks and destination port delivery risks. The buyer only needs to bear taxes and fees and the costs and risks caused by the failure to timely import the goods and customs clearance procedures. For our sellers, it is actually very risky. The charges at the destination port will not be as transparent and clear as in our country. After all, we don't know the charge standards for the destination, and the delivery fee is estimated to be enough for us.

DDP (Delivered Duty Paid): refers to the delivery after duty paid at the port of destination. Duty paid delivery means that the seller completes import customs clearance procedures at the designated destination and delivers the goods that have not been unloaded on the delivery vehicle to the buyer , Complete delivery. The seller must bear all risks and costs of transporting the goods to the designated destination, including any taxes and fees that should be paid at the destination when customs procedures are required.

   Under the DDP trade term, the buyer is equivalent to sitting and waiting for the goods, but the DDU seller has the greatest responsibility. Under normal circumstances, I would not choose to do DDP. If it is not mandatory for the customer to do it, I will persuade the customer to do CIF. We have no way to control customs clearance at the port of destination. Once customs clearance is not clear, all the expenses will be paid We bear it, because our sellers need to bear all the risks in the process of delivering the goods to the designated destination, and also need to go through the customs clearance procedures at the destination port, and pay taxes, handling fees and other fees.

EXW has the least risk, almost no risk, as long as the goods are delivered to the customer's designated freight forwarder in the factory. Let's take a look at what the least risky trade term looks like:

EXW (EX works) factory delivery means that when the seller delivers the goods to the buyer at its location or other designated locations (such as a workshop, factory or warehouse), the delivery is completed, and the seller does not go through export customs clearance procedures or The goods are loaded on any means of transportation.

The term    is the least risky term for our seller, but the buyer must bear all the costs and risks of receiving the goods at the seller’s place, just like we do DDP, so if you can do EXW, don’t take DDP.

  The choice of trade terms determines our risk, so we must pay special attention.
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