What is DDU (Delivered Duty Unpaid)?

Delivered Duty Unpaid (DDU) is an old international trade term indicating that the seller is responsible for the safe delivery of goods to a named destination, paying all transportation expenses, and assuming all risks during transport. Once the goods arrive at the agreed-upon location, the buyer becomes responsible for paying import duties, as well as further transport costs. However, Delivered Duty Paid (DDP) indicates that the seller must cover duties, import clearance, and any taxes.

Key takeaways:

Under the DDU shipping term, the seller is required to deliver things to the agreed-upon destination in the country of importer. Unless different arrangements have been agreed upon in advance, the buyer would be responsible for the remaining costs and delivery of the package. This includes paying for any custom fees, taxes and duties.

Delivery Duty Unpaid certainly has benefit for both parties.

It's essential for both buyers and sellers to understand the distinctions between Delivered Duty Paid (DDP) and Delivered Duty Unpaid (DDU Shipping) Incoterms in order to choose the most cost-effective shipping service for their needs.

Seller's obligations under the DDU Incoterm:

1.Delivers the goods, as well as the documentation that proves the buyer can take legal possession of them.

2.Responsible for all documentation required to export the goods.

3.Once the goods are delivered to the destination country, all risk is transferred to the buyer.

4.Seller pays for the delivery, loading, labor, and transportation costs up to the destination country.

Buyer's obligations under the DDU Incoterm:

1.Pays for the delivered goods.

2.Responsible for all documentation required for import clearance once the shipment has arrived.

3.Once the goods are delivered alongside the ship, the buyer is responsible for any loss or damage from that point on.

4.Buyer pays for the import duties and taxes, customs charges, unloading costs, and delivery costs to their own warehouses.

The difference between Delivered Duty Unpaid (DDU) and Delivered Duty Paid (DDP):

In the world of shipping, delivered duty unpaid (DDU) simply means that it's the customer's responsibility to pay for any of the destination country's customs charges, duties, or taxes. These must all be paid in order for customs to release the shipment after it arrives. On the other hand, delivered duty paid (DDP) means it's the shipper's responsibility to pay any of the customs charges, duties, and/or taxes required to send the product to the destination country.

Notes:

If the parties want the seller to fulfill the customs formalities and bear the corresponding costs and risks, this must be made perfectly clear by using words to that effect.

If the parties wish to add some of the costs payable for the import of goods (such as value added tax (VAT) ) to the seller’s obligations, this must be made perfectly clear by using words to that effect: delivered duty unpaid, including VAT, etc. (agreed destination).

Import and export companies that work under license and regularly get a large number of shipments actually prefer DDU.