DDP (Delivered Duty Paid) is an Incoterms rule in which the seller delivers the goods to the buyer’s named place, cleared for import. The seller pays the import duties and taxes and carries all costs and risks until the goods arrive, ready for unloading. DDP can be used for any mode of transport.
How DDP Works
The seller arranges every leg: export clearance, main transport, import clearance and delivery to the named place. The buyer only unloads the goods when they arrive. For example, a dealer in Texas could sell an excavator DDP to a contractor’s yard near Melbourne.
To clear the import, the seller or its agent acts as the importer of record in the buyer’s country. It pays the import duty and taxes such as value added tax (VAT) and builds the cost into the sale price. Some countries do not let a foreign company act as importer, which can make DDP hard to perform.
Risk stays with the seller for the whole trip. If the machine is damaged at sea or held by customs, the seller deals with the problem and its cost.
Why DDP Matters for Heavy Equipment Shipping
DDP gives an equipment buyer one delivered price and very little paperwork. The seller, however, needs reliable partners for heavy lifts, oversize trucking and customs at destination. Duties and taxes on machinery can be a large part of the cost, and a wrong estimate falls on the seller.
Before agreeing to delivered terms, both sides should check the import rules of the destination country. Buyers can compare DDP with port-based terms through APC’s equipment sourcing and procurement service.
| Item | Seller | Buyer |
|---|---|---|
| Export clearance | Yes | No |
| Main transport to the named place | Yes | No |
| Import clearance, duties and taxes | Yes | No |
| Risk in transit | Yes | Only after delivery |
| Unloading at the named place | No | Yes |
DDP vs EXW
DDP and EXW (Ex Works) sit at opposite ends of the Incoterms rules. Under EXW, the buyer collects the goods at the seller’s premises and handles everything after that. Under DDP, the seller handles everything until the goods reach the buyer’s door, including import duties.
For a machine sale, EXW suits a buyer with its own forwarder and customs broker. DDP suits a buyer who wants a fixed delivered cost, as long as the seller can clear imports in that country.
Common Mistakes With DDP
- Agreeing to DDP without checking whether the seller can act as importer in the buyer’s country.
- Leaving VAT or other import taxes out of the delivered price.
- Naming a city instead of the exact delivery address or job site.
- Not planning who provides a crane or forklift to unload the machine at the site.
FAQ
Want a delivered cost for a machine before you agree to DDP? Request a quote that covers freight to your site.
