What are the terms of door-to-door shipping?
In addition to common shipping terms such as EXW and FOB, door-to-door shipping is also a popular choice for customers of Senghor Logistics. Among them, door-to-door is divided into three types: DDU, DDP, and DAP. Different terms also divide the responsibilities of the parties differently.
DDU (Delivered Duty Unpaid) terms:
Definition and scope of responsibility: DDU terms mean that the seller delivers the goods to the buyer at the designated destination without going through import procedures or unloading the goods from the delivery vehicle, that is, the delivery is completed. In the door-to-door shipping service, the seller shall bear the freight and risk of shipping the goods to the designated destination of the importing country, but the import tariffs and other taxes shall be borne by the buyer.
For example, when a Chinese electronic equipment manufacturer ships goods to a customer in USA, when the DDU terms are adopted, the Chinese manufacturer is responsible for shipping the goods by sea to the location designated by the American customer (the Chinese manufacturer can entrust the freight forwarder to take charge of). However, the American customer needs to go through the import customs clearance procedures and pay the import tariffs by himself.
Difference from DDP: The main difference lies in the party responsible for import customs clearance and tariffs. Under DDU, the buyer is responsible for import customs clearance and payment of duties, while under DDP, the seller bears these responsibilities. This makes DDU more suitable when some buyers want to control the import customs clearance process themselves or have special customs clearance requirements. Express delivery can also be considered DDU service to a certain extent, and customers who ship goods by air freight or sea freight often choose DDU service.
DDP (Delivered Duty Paid) Terms:
Definition and scope of responsibilities: DDP stands for Delivered Duty Paid. This term states that the seller bears the greatest responsibility and must deliver the goods to the buyer’s location (such as the buyer or consignee's factory or warehouse) and pay all costs, including import duties and taxes. The seller is responsible for all costs and risks of transporting the goods to the buyer’s location, including export and import duties, taxes and customs clearance. The buyer has minimal responsibility as they only need to receive the goods at the agreed destination.
For example, a Chinese auto parts supplier ships to a UK import company. When using the DDP terms, the Chinese supplier is responsible for shipping the goods from the Chinese factory to the warehouse of the UK importer, including paying import duties in the UK and completing all import procedures. (Importers and exporters can entrust freight forwarders to complete it.)
DDP is very beneficial for buyers who prefer a hassle-free experience because they don’t have to deal with customs or additional fees. However, sellers must be aware of the import regulations and fees in the buyer’s country to avoid unexpected fees.
DAP (Delivered at Place):
Definition and scope of responsibilities: DAP stands for “Delivered at Place.” Under this term, the seller is responsible for shipping the goods to the specified location, until the goods are available for unloading by the buyer at the designated destination (such as the consignee's warehouse door). But the buyer is responsible for import duties and taxes. The seller must arrange transportation to the agreed destination and bear all costs and risks until the goods arrive at that place. Buyer is responsible for paying any import duties, taxes, and customs clearance fees once the shipment arrives.
For example, a Chinese furniture exporter signs a DAP contract with a Canadian importer. Then the Chinese exporter needs to be responsible for shipping the furniture from the Chinese factory by sea to the warehouse designated by the Canadian importer.
DAP is a middle ground between DDU and DDP. It allows sellers to manage delivery logistics while giving buyers control over the import process. Businesses that want some control over import costs often prefer this term.
Customs clearance responsibility: The seller is responsible for export customs clearance, and the buyer is responsible for import customs clearance. This means that when exporting from a Chinese port, the exporter needs to go through all export procedures; and when the goods arrive at the Canadian port, the importer is responsible for completing import customs clearance procedures, such as paying import tariffs and obtaining import licenses.
The above three door-to-door shipping terms can be handled by freight forwarders, which is also the significance of our freight forwarding: helping importers and exporters divide their respective responsibilities and deliver the goods to the destination on time and safely.
Post time: Dec-03-2024
