Delivered Duty Unpaid (DDU)

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Delivered Duty Unpaid (DDU): What It Means and How It Works

What is DDU?

Delivered Duty Unpaid (DDU) is an international shipping term that places responsibility for transporting goods to an agreed destination on the seller, while leaving payment of import duties, taxes, customs clearance, and any onward transport at destination to the buyer. In practice, sellers arrange and pay for carriage to the named place, and buyers handle import formalities and costs once the goods arrive.

Note: DDU is no longer an official ICC Incoterm. The modern equivalent commonly used is Delivered at Place (DAP), introduced to clarify responsibilities; Delivered at Place Unloaded (DPU) requires the seller to unload the goods at the destination.

How DDU works

  • Seller responsibilities until delivery:
  • Arrange and pay for carriage to the agreed place (e.g., “DDU: Port of Los Angeles”).
  • Obtain export licenses and handle export formalities.
  • Bear risk of loss or damage during transit up to the delivery point.
  • Provide commercial invoice and necessary shipping documents.
  • Buyer responsibilities after arrival:
  • Arrange and pay for import clearance, duties, taxes, and inspections.
  • Assume all risks and additional transport costs from the delivery point onward.
  • Obtain import licenses and comply with local import requirements.

DDU vs. DDP (Delivered Duty Paid)

  • DDU: Buyer is responsible for import duties, taxes, and customs clearance. Seller delivers goods to the named place but does not clear them for import.
  • DDP: Seller is responsible for all costs and risks, including import duties, taxes, and customs clearance. Buyer receives goods with all formalities completed.

Pros and cons of DDU

Pros:
– Buyers retain control over their country’s import process and may optimize local logistics.
– Sellers avoid handling unfamiliar import procedures and costs at destination.
– Useful when buyers prefer to use local customs brokers or have negotiated duty treatments.

Cons:
– Buyers may face surprise duties, taxes, or additional charges on arrival.
– Unexpected charges can lead to delivery refusals and customer dissatisfaction.
– Sellers risk strained relationships if buyers are unprepared for import costs.

When to use DDU (or DAP) vs. DDP

  • Choose DDU/DAP when:
  • The buyer prefers control of import clearance and local logistics.
  • The buyer has better knowledge of local regulations or duty mitigation strategies.
  • Choose DDP when:
  • The buyer wants a fully landed-cost experience with no surprises.
  • The seller can efficiently manage import formalities and prefers to offer all-inclusive pricing.

Practical notes

  • Although DDU remains familiar in trade conversation, use DAP (or the appropriate 2010/2020/2023 Incoterm) in contracts to align with ICC terminology and avoid ambiguity.
  • Specify the exact delivery location in the contract (e.g., terminal, warehouse, or port) and clarify who is responsible for unloading if relevant—DPU covers seller-unloading obligations.

Quick FAQs

Bottom line

DDU places freight delivery responsibility with the seller but shifts import formalities and costs to the buyer. It can give buyers control over local clearance but risks surprise costs and delivery refusals. For clarity and consistency with international standards, use the corresponding Incoterm (typically DAP or DPU) in contracts to avoid misunderstandings.