What is DDU?
Delivered Duty Unpaid is a transborder commercial term that represents the marketer’s liability for the secure freight delivery to a specified location. Payment of shipping expenses and taking every risk during transportation is also the accountability of the consignor.
The purchaser is answerable for paying import duties and for further shipping charges upon supply to the addressee.
What is DDU shipping on practice?
Delivery without payment of duty (DDU) was not comprised in the latest (2010) publication of the Incoterms of the International Chamber of Commerce. However, this abbreviation keeps on to be used even in treaties. A similar term officially replaced the DDU is called Delivered At Point (DAP). After this abbreviation in the contract, it is needful to indicate the exact place of delivery “DDU: Port of Kaliningrad”.
In accordance with the DDU agreements, the dealer envisages licenses. The shipper is accountable for customs duties and transit expenses. The seller takes all risks until the freight is delivered to the needed destination. Insurance can be paid, but at the expense and at the request of the customer.
The purchaser is obliged for providing all needful licenses to import cargo and pay fees, duties, and customs clearance taxes. As soon as the freight is made available to the customer, transportation expenses and risks are borne by him.
In 2017, the development of a new edition of Incoterms began. It will be released in 2020. The term DDU was not planned to be returned to use in Incoterms in 2017-18.
Difference between DDP and DDU
The distinction between the DDU and DDP supply terms may be described as next:
DDU signifies “Delivered Without Duty Payment”. DDP signifies Delivered Duty Paid.
- When sending a DDU, with the exception of the duties or taxes of the importing country, all fees must be paid-up by the marketer. Thus, the price of freight comprises the costs of delivering cargo to the stock of the recipient. Taxes of the importing country are excluded.
- When sending the DDU, the dealer assumes all needful expenses for transportation, customs clearance, and supply. In the port of downloading and in the port of destination, the shipper also pays the processing and storage spending.
The abbreviation DDP stands for “Delivered Duty Paid”. The marketer covers the expenses. They include:
- Fees or taxes on cargo.
- DDP Delivery to the territory of the purchaser by any means of transport.
- Cargo insurance.
- Loading and unloading operations in ports or terminals.
It indicates the worth of cargo must include all customs duties and transit fees on the way from the consignor to the consignee.
To properly draw up a commercial contract, it is not enough to know Incoterms. The practice of drawing up international documents is needed. To take into account all the nuances and protect yourself from unexpected expenses, contact NH Logistics. 17 years experience of international deliveries guarantees the speed and accuracy of the contract execution for any business!