Delivered Duty Paid (DDP) is an international shipping method businesses use to improve customer experience and ensure transaction transparency.
Delivered Duty Paid Definition
DDP is a billing option that enables the shipper to send a package internationally, with the associated duties, taxes, and clearance fees billed back to them by the carrier after delivery. International trade involves numerous regulations and customs protocols that vary by country, making it challenging to determine the true landed cost of a package. By using DDP, the shipper assumes responsibility for these fees. Some businesses absorb these costs for their customers, while others allow the receiver to pre-pay, collecting the full amount at checkout.
Collection of costs at checkout
When using DDP shipping, the shipper is accountable for duties, taxes, and fees, but these costs don’t have to be absorbed by the shipper. In an e-commerce setting, these fees can be calculated and collected from the customer during checkout, enhancing their overall experience.
By providing a clear breakdown of duties, taxes, and fees at purchase, customers completely understand the total landed cost, fostering trust and preventing unexpected charges upon delivery. Additionally, since all fees are paid in advance with DDP shipments, shippers can often avoid customs complications, leading to faster and more seamless deliveries.
How DDP can help your store
- Improved Customer Experience: Giving customers complete cost transparency at checkout builds confidence and reduces the likelihood of refused or returned packages.
- Elimination of Cost Confusion: DDP shipping covers all duties, taxes, and fees to transport the shipment from the shipper to the recipient, clarifying the total landed cost.
- Quick and Smooth Delivery: With DDP shipping, customs fees are paid in advance, facilitating quicker clearance and ensuring a seamless delivery process without additional consumer bills.
DAP/DDU
An Incoterm indicating that the receiver is responsible for paying all associated duties, taxes, and clearance fees before receiving the package. Previously known as "Delivered Duty Unpaid" (DDU), these terms are often used interchangeably. Under DAP, the shipper sends the package, the carrier covers duties and taxes at customs and then collects these costs from the recipient upon delivery.
If the recipient is surprised by the additional bill, they may reject the parcel. In such cases, the shipper can either have it returned, bearing the duties, taxes, and shipping costs or abandon it if the return costs exceed the package's value. However, some countries do not permit package abandonment and enforce returns, leading to significant expenses for shippers and online retailers.
💡 Incoterms are standardized trade terms created by the International Chamber of Commerce to define the responsibilities of buyers and sellers in international transactions. They cover aspects like transportation, insurance, and customs clearance.
When DAP Shipping is Recommended
DAP is advised for business-to-business (B2B) shipments where the receiving business can reclaim or refund duties and/or taxes. A clear paper trail must show the receiving business paid the import duties and taxes, typically documented during corporate tax filings for reclaim or refund purposes.
For a full comparison between DDP and DAP, see this article.
When DDP is Recommended
DDP is ideal for business-to-consumer (B2C) shipments as it ensures a better international shipping experience, whether the business covers the duties, taxes, and fees or is collected at the time of purchase. This transparency leads to a more positive customer experience, higher chances of repeat business, and increased trust between the business and the consumer.
Since rules and regulations vary by country and some countries do not permit DDP shipments, it is crucial to consult an international shipping expert to navigate these complexities.
Where DDP is not Available
Some countries do not allow DDP imports. Here is a list of those countries:
| Country |
|---|
| Andorra |
| Albania |
| American Samoa |
| Angola |
| Anguilla |
| Antigua |
| Armenia |
| Azerbaijan |
| Belarus |
| Benin |
| Bhutan |
| Bolivia |
| Bosnia-Herzegovina |
| Botswana |
| Brazil |
| British Virgin Islands |
| Burkina Faso |
| Burundi |
| Cameroon |
| Cape Verde |
| Chad |
| Congo, Dem. Rep of |
| Cook Islands |
| Djibouti |
| East Timor |
| El Salvador |
| Eritrea |
| Estonia |
| Ethiopia |
| Faroe Islands |
| Fiji |
| French Polynesia |
| Gabon |
| Gambia |
| Georgia, Republic of |
| Ghana |
| Gibraltar |
| Greece |
| Greenland |
| Guam |
| Guernsey C.I. |
| Guinea |
| Guyana |
| Haiti |
| Iceland |
| Ivory Coast |
| Jersey C.I. |
| Kazakhstan |
| Kenya |
| Kyrgyzstan |
| Lesotho |
| Liberia |
| Macedonia |
| Madagascar |
| Malawi |
| Maldives, Republic of |
| Mali |
| Marshall Islands |
| Mauritania |
| Moldova |
| Mongolia |
| Montenegro |
| Montserrat |
| Mozambique |
| Namibia |
| Nepal |
| New Caledonia |
| Nigeria |
| Palestine |
| Papua New Guinea |
| Portugal |
| Reunion |
| Russia |
| Rwanda |
| San Marino |
| Senegal |
| Serbia |
| Seychelles |
| Slovenia |
| Tanzania |
| Togo |
| Tonga |
| Tunisia |
| Uganda |
| Uzbekistan |
| Vanuatu |
| Vatican City State |
| Yemen, Republic of |
| Zambia |
| Zimbabwe |