Is a supplier suggesting to ship to you “Delivered Duty Paid,” or “DDP”? Hold up. There are questions should you ask and have an answer to before making a purchase on DDP shipping terms.
What is DDP?
DDP (“Delivered Duty Paid”) is one of 11 Incoterms® defined by the International Chamber of Commerce (ICC). Under the DDP term, the seller is responsible for covering all costs of the transport of goods, including customs clearance, import duties, and related fees.
Questions to ask about DDP shipping
The book Incoterms® Rules for Americans® by Frank Reynolds suggests questions that any exporter should be able to answer before shipping DDP. From our experience, it is also important for any buyer to make sure company sending product to them on DDP terms can answer the questions laid out on page 133.
We recommend purchasing the book for the full list of questions from Reynolds. However, some of the important questions any buyer should consider include:
- Does the supplier know the full responsibilities of the seller under DDP as defined in Incoterms® 2020 rules?
- Does the supplier know how import clearance is done in the buyer’s country?
- Are they acting as the importer of record for the transaction? Or are you?
- Does the seller know the duty rate that applies to the product in the buyer’s country? Do they know if Section 301, anti-dumping, or countervailing duties apply?
Get third-party verification
Need help asking your supplier these questions? Make sure to use the DDP Check tool for third-party verification.