DDP delivery method is a secure option preferred by the buyer and plays an important role in international trade. The words “DDP” (Delivery Duty Paid) indicate that the delivery of goods is made including customs duties and other costs paid by the seller. In this method, the seller is responsible for transporting the goods to the specified destination, completing customs procedures, and paying all taxes. DDP, one of the most advantageous Incoterms rules for the buyer, provides minimal risk and responsibility. The seller handling all logistics and customs processes greatly simplifies the process, requiring only the delivery of goods to the buyer.
What is DDP Delivery Method?
The DDP (Delivery Duty Paid) delivery method is defined as a delivery method with paid taxes in Turkish. It is frequently preferred in international trade because it minimizes the buyer’s obligations. The seller assumes all transportation risks and responsibilities until the goods reach the buyer. It also includes the process of reaching the target country and paying all necessary taxes. During this process, the seller organizes the delivery between the shipper and the buyer, ensuring that the goods reach the buyer with taxes paid. Therefore, the buyer is only responsible for receiving the goods, and all other procedures are carried out by the seller. It offers a significant advantage for countries with complex customs procedures.
How is DDP Calculated?
To calculate the overseas DDP delivery, all necessary costs for the evaluated items must be first summed. These costs include the product price, shipping fees, insurance, and customs duties. During the calculation process, it is important to determine the correct values for each evaluated item. Additionally, the customs regulations of the target country should be considered.
- Packaging
- Product cost
- Profit margin
- Customs and local taxes in the buyer’s country
- In-country transportation and unloading costs in the buyer’s country
- Loading
- Domestic transportation
- Customs expenses
- Insurance
- Freight
Changes Made in DDP Incoterms 2025 Delivery Method
The DDP Incoterms 2025 Delivery Method includes specific responsibilities regarding customs costs and rules encountered by sellers in different countries. It requires sellers to handle all customs procedures and expenses at the destination. While enabling sellers to have more control in international trade, it also helps buyers avoid dealing with the complexity of processes. However, caution should be exercised when choosing the DDP Incoterms 2025 Delivery Method. Since each country’s customs regulations and practices vary, sellers must understand these rules well. Otherwise, the risk of unexpected costs increases.
What are Seller Responsibilities in DDP Delivery?
Seller responsibilities in DDP delivery include several important steps until the products reach the customer. First, the seller must perform packaging processes to ensure the safe transportation of the products. Then, the products should be transported to the designated point before export customs procedures are carried out. The seller’s responsibilities also include loading onto the main transportation vehicle and the main transportation itself. All necessary precautions must be taken to ensure the safe transportation of the products during these stages. Arranging transportation insurance is an important step against possible damages. After unloading the products from the main transportation vehicle, the seller is also responsible for completing import customs procedures. The final transportation process is also the seller’s responsibility, and all steps necessary to ensure the products reach the customer must be executed flawlessly.
Buyer Responsibilities in DDP Delivery
In DDP (Delivered Duty Paid) delivery, the buyer has no responsibilities. The supplier assumes all transportation and customs procedures, bearing all risks and responsibilities when delivering the product to the buyer. This is the complete opposite of the EXW (Ex Works) loading type, which places responsibilities and risks on the buyer. In EXW, the buyer assumes all transportation and loading responsibilities, whereas in DDP, the seller manages all these processes.
How Does the DDP Delivery Method Work?
With the DDP delivery method, the risk is transferred to the buyer when the products reach the destination. This method requires the seller to handle all loading, transportation, and customs clearance procedures. Therefore, the seller has the lowest level of responsibility to fulfill. The buyer only waits for the product to be delivered in this process. This delivery method provides great convenience for the buyer because it minimizes costs and eliminates the need to deal with customs procedures. The buyer can focus on their work with minimal effort at every stage of the supply process.
What Are the Features of the DDP Delivery Method?
The DDP delivery method is of great importance in international trade. Its most prominent feature is that the buyer has the least responsibility. The seller is responsible for bringing the goods to the pre-determined delivery address with import procedures completed, and for unloading the goods from the destination transportation vehicle. This minimizes the buyer’s obligations related to import processes. However, the DDP delivery method should not be used in cases where the seller cannot perform import procedures; in such cases, the DDU term should be preferred, which makes the buyer responsible for import processes.
Why Use the DDP Method?
The paid customs duty delivery (DDP) method is especially preferred today for reasons such as the following. Primarily, this method is designed to protect the buyer. It ensures that the buyer receives the goods with all customs procedures and taxes paid in advance, avoiding surprise costs. Making secure deliveries to the destination is an important advantage of DDP for international trade. The seller assumes all responsibility during transportation, easing the burden on the buyer. This increases mutual trust and enables more efficient trade. Delivering safely by sea or air freight is another benefit of DDP. Minimizing risks during transportation offers significant advantages for both the buyer and the seller.
Interested: What is Freight in Logistics, How is it Calculated?
