The international chamber of commerce ICC publishes incoterms. Incoterms are a set of rules that help in harmonizing the international trade business carries out among different companies. The purpose of the incoterms is to eradicate any confusion and misunderstanding that may arise. Incoterms rules set the responsibilities, risks, and duties of buyers and sellers so that there is no dispute among the parties. In our previous blog, we have discussed in detail the incoterms. Incoterms can be divided into 11 major rules. These 11 incoterms cover all modes of transportation such as air, land, and sea. The latest incoterm was publish in 2020, that is called incoterm 2020.

The role of incoterm is very crucial in international trade. Ecommerce businesses throughout the globe use these incoterms for trading. When we are discussing the incoterms, the most popular delivery incoterm used mostly in businesses is DDP delivery services. Although there are 3 incoterms that are more relate to the delivery services are DDP delivered duty paid, DDU delivered duty un-paid, DAP delivered-at-place.

Ddp Delivery Terms

The ddp delivery terms are mostly used in e-commerce businesses. Ddp delivery services are the most preferred term by the buyers. Delivered duty paid shipping to provide ease to the buyer in comparison to the DDU delivered duty unpaid. In the case of DDU, the customer himself has to pay for the duties at the destination as well as arrange for the final transportation till it is placed from the place where duty was paid.

Ddp delivered duty paid is a delivery service that is offer by the seller to the buyer. Under ddp delivery services the seller is responsible for all the risk, the cost for the transportation, duties, fees, and another cost till the product is receive by the buyer at its destination.

Ddp delivery services provide the buyer the liberty to buy products without the fear of being scam or fraud, as he will receive the product at his doorstep, as he is not liable to pay for shipping or duties or taxes. Although ddp delivery services is big benefit for the buyer, it can be a burden on the seller, as he has to arrange for the shipping and duties of the product. If ddp delivery service handled incorrectly by it seller might face revenue loss.

Process of Delivery Duty Paid Shipping

Seller is mostly responsible in ddp delivery shipping. There are four stages involved in the ddp logistics:

1. Product dropped at shipper – liability of the seller

In the first step, the seller of the product under ddp delivery services will drop the product with its trusted, approved shipper. Shipping under ddp is the seller’s responsibility.

2. Product shipped – liability of the seller

In the second stage under ddp delivery services, the carrier will transport the product visa air or sea or land as required by the seller. Shipping cost is the seller’s responsibility.

3. Duties and taxes at the destination – liability of the seller

In the third stage of ddp shipping, duties and taxes are paid at the destination port. The duties and taxes paid are the seller’s responsibility.

4. Product delivered at the destination- afterward buyer responsibility

In the last stage of ddp delivery services, as the product is delivered at the final destination, further responsibility and liability is pass onto the buyer of the products.

Benefits of Delivery Duty Paid Shipping for Buyers

There are a lot of benefits to using ddp delivery services. Some of the important benefits are as follows:

Buyer protection

As in ddp delivery services, the seller is responsible for the shipping, cost, and delivery of the product to the buyer, thus the buyer’s interest is saved from any harm from being scammed or fraud.  Due to the increased responsibility of the seller in ddp shipping, the seller ensures that the shipped product is as per the demand of the buyer.

Seller responsibilities

In the case of ddp delivery services, the seller is responsible for the logistics, shipping, and duties or fees. This option gives buyers the ability to relax and let the seller handle all the shipping and cost. As the seller is experienced in handling shipping and other international fees, the transaction will be smooth. The chances of any mishandling will be minimized.

Safe Package

In ddp delivery term as the seller is responsible for the delivery of the product to the customer place. So in ddp incoterm, the seller ensures that the packaging of the product is safe and in good condition. So as the product reaches the customer safe and sound. 

Delivered duty paid shipping is the safest and secure way of buying a product on e-commerce, as the buyer will get the product at its doorstep. Without the tension of paying shipping and other fees or duties.

Responsibilities of Seller Under Ddp Delivery Services.

DDP delivery services are the preferred option for the buyers. And buyers prefer to buy more products under ddp incoterms to ensure their safety from scammers. On the other hand, ddp delivery services are very difficult for inexperienced sellers to handle, as it involves a lot of duties and fees. Seller need to handle ddp shipping very consciously. The list of different fes that are the liability of th seller under ddp delivery terms.

• Shipping cost

Under ddp delivery terms the shipping cost is the responsibility of the seller. Seller needs to calculate the shipping cost before quoting the rates of the product to the customer. Any mistake in the calculation of lower shipping costs can result in revenue losses for the seller.

• Custom duties

Under ddp delivery terms the seller is responsible for all the export duties as well as the import duties at the destination. The seller should calculate the import and export duties beforehand while quoting the price to the buyers. The seller usually takes the services of a shipping agent to calculate and pay these costs. Sipping agents are helpful in calculating the exact cost duties.

• Demurrages 

The cost of demurrages is the liability of the seller even at the port of destination. The seller needs to engage an experienced shipping agent, so as to clear and lift its product within the free time allowed at the port, subsequently as to avoid demurrages.

• Damaged packaging

Under ddp incoterm, the seller is responsible for the safety of the product until it is deliver to the customer. Any damage in the way to the product or the packaging will cost the seller, as it is his responsibility. So the experienced seller will always use safe packaging.

Ddp delivery services are the most preferred way of booking products by the buyer on e-commerce sites. The ddp incoterms provide the buyer the best safety against any fraud or scam. It also gives the buyer the ease of getting delivery of the product without any hassle of shipping and duties payments.

Conclusion

The seller under ddp delivery terms has additional responsibility and liability of the product till its delivered to the customer. The seller can safeguard his interest and avoid any losses by engaging trusted carriers and experienced shipping agents. DDP delivery services is a win for both buyer and seller, as it gives the buyer the ease of ordering and the seller high sales volume, with satisfied customers.