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The Advantages And Disadvantages Of The DDP Shipping Agreement

The meaning of DDP in shipping;

Although the DDP shipping requirement is not the best solution, it is important to know it, although this condition is ostensibly “in the interest of the importer”, the reality is different from that for many reasons, including that it robs the importer of full control over the import process.

What is the meaning of DDP in charging? What are your obligations as an importer and what are the obligations of the supplier? What are its features and disadvantages for you? And when can you rely on a shipping agreement “DDP”? And why not consider it the best choice when determining shipping terms? Follow the article to the end to find out.

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First: The meaning of DDP in shipping

Term and meaning of DDP in shipping: It is one of the terms of the International Trade Terms, which is an abbreviation for the English word (Delivery Duty Paid) or “delivery fee paid”, and states that the supplier must ship your goods and ensure that they reach the previously agreed place (your factory or warehouse…) , the costs and risks of shipping the goods until they arrive at the agreed place shall be borne by the supplier.

Under the “delivery fee paid” shipping agreement, the supplier assumes full responsibility for all costs and risks until the goods are unloaded at the agreed location. The supplier is responsible for the shipping process from start to finish.

Second: Obligations of the importer and the supplier under the shipping agreement “DDP”

Do not worry, your obligations in the shipping agreement “delivery fees paid” are very simple obligations compared to other shipping agreements, as the supplier will bear most of the risks and costs of shipping.

In this axis, we will present to you your most important obligations as an importer and the most important obligations of the supplier under the shipping agreement “delivery fees paid”.

1- Obligations and fees borne by the importer:

As an importer, your obligations under the shipping agreement “delivery charges paid” do not exceed your obligation to pay for the goods shipped to you. Or assist the supplier in obtaining any necessary documents or information that assist him in customs clearance procedures in the country of arrival.

Otherwise, you are not responsible for any other obligations related to the shipping process, any paperwork or other fees.

2- Obligations and fees borne by the supplier:

Under the shipping agreement “delivery fee paid”, the supplier is bound to:

  • Delivery of goods at the specified place accompanied by the required documents.
  • Commitment to the packaging procedures of the goods.
  • Commitment to transport fees within the country of import and handling fees for goods at the port of shipment.
  • Commitment to customs clearance fees at the port of shipment.
  • Commitment to the shipping process until the shipment reaches the place specified between you in the contract.
  • Obligation to pay customs clearance fees in your country immediately upon arrival of the goods at the port of arrival.
  • Pay all duties and taxes on shipped goods.
  • Commitment to the expenses of transporting the goods in your country until they reach your warehouse or factory.

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Third, the advantages and disadvantages of the DDP shipping agreement

The “delivery at a specific place” shipping agreement gives most of the obligations and shipping costs to the supplier.

In this axis, we will present to you the most important advantages and disadvantages of the shipping agreement “delivery fees paid”.

1. Features of using the shipping agreement “Delivery Fee Paid”:

  • You will not incur any costs or responsibilities related to the imported shipment or delivery charges, and you only have to collect the shipment at the place agreed with the supplier within the terms of the contract.
  • No risk exists under the shipping agreement “delivery charges paid” or are very limited.
  • You can use on the shipping agreement “Delivery Charges paid” in different shipping types (sea, air, land or multiple).

2. Disadvantages of using the shipping agreement “Delivery Fee Paid”:

  • You cannot follow up and monitor the shipping process due to your limited powers according to the shipping agreement “delivery fees paid”, and therefore the supplier is in control of the shipping process.
  • The total cost of the shipping process will be very high due to the supplier’s commitment to all costs until they reach your warehouse or warehouse.
  • You may face some difficulties in customs clearance procedures in the country of arrival due to some complex customs procedures, so you have to make sure of the laws of the country to which you import the goods, and make sure that its laws are compatible and open to international shipping operations, to ensure that the shipment is not delayed in arriving at your warehouse.

Fourth: When can you rely on a shipping agreement “DDP”?

There are many shipping agreements that help you ship your goods around the world (such as (“CIF”, “FOB” ,”CFR” and “FCA“), and the shipping agreement “DDP” is one of the most popular shipping agreements for suppliers, but as an importer, you have to know several things before choosing the shipping agreement that you will rely on to ship your goods.

When can you rely on a Delivery Fee Paid shipping agreement?

The shipping agreement uses “delivery fees paid” in all types of shipping (sea, air, land and multiple), and gives excellent shipping terms for you as an importer, so you will not have to worry and take risks from the shipping process.

The shipping agreement is considered a “delivery fee paid” in the shipment of high-cost goods, as it helps you not to be deceived, because the seller bears all the risks and cost of shipping the goods in full, it is in his interest to ensure that importers actually receive what they ordered.

Fifth: What is the difference between the shipping agreements “DDP” and “DDU”?

Incoterms agreements are specific logistical terms and can be confusing. In this theme, we introduce you to the related terms “DDP” and “DDU” to introduce you to the difference between them.

The two shipping agreements bind the supplier to all the obligations and costs of the shipping process until delivery in your warehouses or warehouses, but the difference between the shipping agreement “delivery fee paid” and the shipping agreement “unpaid delivery charges” is that the shipping agreement “delivery charges unpaid” requires you as an importer to pay import duties once the shipment enters your country.

Using the “delivery fee unpaid” shipping agreement, the customs authority will contact you as soon as the shipment arrives in your country, and you will have to go through the procedures yourself.

A shipping agreement “delivery fee paid” is better for you as an importer, as it is a cross-border option that takes all fees into account upfront, allowing you to choose whether to pass these charges on to prospects for shipped goods by increasing the price of the product before final pricing and putting on the market.

Finally, at the end of our article “The meaning of DDP in shipping” why do not I advise you this condition? If you choose it, you can be blackmailed by the supplier at any stage of the import, such as if the supplier argues that he has paid certain customs fees or that shipping prices have increased contrary to the truth, after receiving the last payment. Then you will not be able to do anything except comply with his requests or else you will not get the bill of lading and therefore you will not get your goods or the supplier will refrain from shipping the goods in the first place.

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