What Is the Seller Responsible for Under the DDP Incoterm?
DDP creates a heavy lift for a seller. When agreeing to this Incoterm, the seller is responsible for all the costs involved with moving goods to the named place in the agreement. That includes all packing and loading, transit, delivery, import/export, and unloading costs.
As a result, sellers usually offer goods sold under the DDP Incoterm at a higher cost to protect their margins. Sellers may also want to consider insurance since they’re responsible for the shipment until its arrival at the named place.
DDP is the only Incoterm that places import costs on the seller. As a result, less experienced sellers might consider a different Incoterm, and leave buyers to deal with their own import duties, taxes, and customs fees.
What Is the Buyer Responsible for Under the DDP Incoterm?
The seller handles pretty much all of the transportation costs under the DDP Incoterm. As a result, the buyer isn’t responsible for arranging or paying for any of the logistics.
However, buyers should be aware that goods sold under the DDP Incoterm usually come at a higher cost. If you’re a more experienced buyer, you may be able to negotiate a lower per-unit cost from the seller under another Incoterm. Although it would require you to arrange and pay for some of the transportation costs, you might still come out ahead when you tabulate your final cost in the end.
Incoterms Insights: DDP
If you’re considering a contract with the DDP Incoterm, talk to one of our experts. If you’re the seller, we can help you arrange for transportation—and give you an accurate estimate of your costs so you can quote a price with confidence.