Delivery on DDP Terms

The DDP delivery terms are defined by the international Incoterms (International Commercial Terms), recognized worldwide. In September 2010, a new 8th edition of these rules was released, known as Incoterms 2010. The new rules came into effect on January 1, 2011.

Due to their universal application in most countries of the world, Incoterms clearly delineate the rights, obligations, and responsibilities of the seller and buyer. As a result, it becomes possible to reach mutual understanding between the parties more quickly and minimize the likelihood of disputes.

What are DDP Delivery Terms

Delivery under DDP or Delivered Duty Paid is defined as "delivery with duty paid." According to these terms, the seller assumes the costs and risks associated with delivering the goods at a pre-agreed time and to a specified destination.

The responsibility also includes the payment of customs duties and other official charges. Additionally, the seller covers intermediary and customs brokerage services, if they were involved. Thus, the seller is 100% responsible for all processes along the transportation route until the buyer receives the goods.

Features of Delivery under DDP Terms

1. Full acceptance of responsibility by the seller under DDP Incoterms, as they bear all costs and risks associated with delivering the goods to the buyer's door.
2. The seller ensures all procedures are followed and documentation related to customs clearance for both import and export is processed, in addition to covering associated expenses.
3. The seller selects the transportation method, the carrier company, pays for their services, and controls the transportation process.
4. Insurance is at the seller’s expense if deemed necessary.
5. Precise determination of the destination point where responsibility is transferred to the buyer.

It is important to note that in our country, the legislation provides for the possibility of paying customs duties and fees only by an individual or organization that is registered on the territory of Ukraine, i.e., is a resident. Therefore, if the supplier is not a resident, they will not be able to carry out the delivery with payment of duties. Thus, DDP terms do not work directly in our country.

Responsibilities of the Parties Under DDP Rules

Seller's responsibilities under DDP delivery terms include:

• preparation of the shipment, marking, and packaging;
• loading onto transport and delivery to the final destination;
• payment of all expenses related to the organization and execution of transportation;
• completion of export and import customs formalities and procedures, and, if necessary, arranging transit;
• payment of all customs duties (duties, excise taxes, etc.);
• unloading at the place of destination;
• providing the other party with all necessary documentation confirming compliance with DDP delivery terms.

It is important to consider here that in Ukraine, the obligations under the DDP condition can be fully met only by a seller who is a resident and is not restricted in the ability to pay customs fees and duties. Therefore, when goods are delivered from China to Ukraine or from any other country, the foreign supplier can pay the duties by entering into an agreement with a customs broker or a resident organization that can act on their behalf.

Buyer’s responsibilities: 

• acceptance of the cargo at the agreed time and at the location specified in the contract;
• timely payment in accordance with the contract terms;
• reimbursement of storage costs for the shipment after unloading.

Advantages and Disadvantages of DDP Terms

Key advantages:

1. Convenience for the buyer. All concerns about delivery and customs clearance are the seller's responsibility. 
2. Transparency. The buyer knows all costs in advance and does not face unexpected expenses. 
3. Minimal risks for the buyer. The seller is responsible for the cargo until its delivery. 
4. Simplicity in concluding the deal, as DDP terms in logistics are the most straightforward and easy for both parties to agree upon.

Key disadvantages:

1. Significant costs for the seller. All expenses, including customs duties, can significantly increase the cost of the transaction.
2. High risks for the seller. This party assumes full responsibility for all stages of transportation, including possible delays at customs and other unforeseen circumstances.

How to Carry Out Customs Clearance for Goods Under DDP Terms

Customs clearance for shipments under DDP terms consists of several stages:

1. Preparation of documents (invoice, packing list, transport documents, certificates of conformity, etc.), and completion of the customs declaration.
2. Payment of сustoms duties, as established by the Customs Code of Ukraine and other legislative acts. If the seller is not a resident of Ukraine, they can do this through a customs broker.
3. Completion of customs procedures, including cargo inspection and customs declaration verification.
4. Obtaining permits for importing the cargo into the country.

Advantageous DDP Deliveries from DiFFreight Company

DiFFreight Company offers international logistics services with comprehensive solutions for clients and organization of DDP deliveries turnkey. Cooperation with DiFFreight provides:

• full support at all stages of transportation from documentation preparation to customs clearance and final delivery;
• optimization of costs. We work with trusted logistics partners and can help reduce transportation expenses;
• transparency and control. The client can track the movement of the cargo and the delivery status at any time;
• professional consulting. DiFFreight specialists will help with all the nuances of international logistics and customs procedures.

Choosing DiFFreight, you gain a reliable partner for organizing international shipments under DDP conditions, allowing you to focus on the development of your business without getting distracted by logistics issues.