Terms of Trade - DDP vs DDU

Overview

This article explains what terms of trade (also known as Incoterms) are, and outlines the differences between DDP, DDU, DAT, and DAP. Understanding these terms is essential when completing the customs information on invoices for international shipments.

What is terms of trade?

Terms of trade, also called Incoterms or International Commercial Terms, details seller or buy bear the responsibility and cost for  import clearance, duties, and delivery to final destination. Two common terms of trade options are: 

DDP - Delivered Duty Paid

DDP means Delivered Duty Paid, meaning seller bears complete expenses of transportation, customs clearance, and import duties and taxes to reach the goods at buyer's premise. The buyer only needs to receive the goods.

DDU - Delivered Duty Unpaid

DDU means Delivered Duty Unpaid, meaning that buyer has to bear the cost of import customs clearance, and import duties and taxes, while the seller is responsible for shipping the goods to the buyer’s destination, including all costs related to transportation and delivery.

DAT - Delivered at Terminal

DAT means Delivered at Terminal, meaning the seller is responsible for delivering the goods to a terminal (port, warehouse, etc.) at the destination and covering all costs related to transportation and unloading the goods at that terminal, while the buyer handles duties and taxes once the goods have been delivered to the terminal.

DAP - Delivered at Place

DAP means Delivered at Place, meaning the seller is responsible for delivering the goods to a specified destination, covering all costs up until the goods are ready for unloading, while the buyer handles import duties and taxes after delivery.

Updated on: 14/11/2024