What does Delivered Duty Unpaid (DDU) mean and how it works

What Is Delivered Duty Unpaid (DDU)?
Delivered Duty Unpaid (DDU) is an old international trade term indicating that the seller is responsible for the safe delivery of goods to a named destination, paying all transportation expenses, and assuming all risks during transport.

Once the goods arrive at the agreed-upon location, the buyer becomes responsible for paying import duties, as well as further transport costs. However, Delivered Duty Paid (DDP) indicates that the seller must cover duties, import clearance, and any taxes.

Understanding Delivered Duty Unpaid (DDU)

The International Chamber of Commerce (ICC) emerged post World War I, aiming to bolster European prosperity by establishing trade standards. In 1936, it introduced standardized terms for shipping agreements, termed Incoterms.

Incoterms delineate contract specifics regarding cost and risk allocation in international transactions, subject to ICC's discretion. Streamlining legal and logistical complexities, ICC standardizes terms to facilitate business.

Notably, the 2020 Incoterms revision can be directly purchased from the ICC website.

Delivered Duty Unpaid (DDU) was omitted from the recent (2010) Incoterms edition; Delivered-at-Place (DAP) now mirrors its function.

Nonetheless, DDU remains prevalent in trade parlance, specifying delivery location (e.g., "DDU: Port of Los Angeles").

DPU Shipping

Delivered at Place Unloaded (DPU) is another term distinguishing shipping methods. Here, the seller unloads goods at the destination.

Responsibilities Under Delivered Duty Unpaid (DDU)

Under DDU, the seller handles export licenses and associated formalities, along with costs in transit countries and invoicing. The seller bears risk until delivery but isn't obligated to insure goods.

Buyers secure import licenses, paying taxes, duties, and inspection fees, bearing related risks. After delivery, all transportation costs and risks fall on buyers.

Delivered Duty Unpaid (DDU) vs. Delivered Duty Paid (DDP)

DDU entails customers paying destination customs charges, duties, and taxes, unlike DDP, where the shipper covers these expenses.

Advantages and Disadvantages of Delivered Duty Unpaid (DDU)

DDU offers buyers shipping control, aiding inventory management and cost tracking. Sellers benefit from reduced involvement in destination country regulations.

However, surprise duty charges pose a risk for buyers, potentially leading to refusal of delivery.

DDU Shipping FAQs

Is DDU Shipping or DDP Shipping Better?

Preference between DDU and DDP hinges on shipping control versus streamlined procedures, varying according to buyer priorities.

Who Is Responsible for DDU Shipments?

Under DDU, sellers are accountable for delivery until unloading, while buyers bear unloading costs and risks.

Is DAP the Same as DDU?

Introduced in 2010, Delivery-at-place (DAP) effectively replaced DDU, rendering them synonymous.