What are DDU and DDP Services in Air Freight?
The advancement of the aviation industry makes air freight an available option for transporting. If you are looking to ship goods domestically or internationally, you can take air freight into consideration when needs arise.
Some incoterms like DDU and DDP are adopted in the air freight industry. Who takes on what responsibility hinges on the incoterm of the shipment. For example, DDU and DDP determine whether the seller or the buyer is liable for the relevant duties and taxes. Understanding the difference between DDU and DDP can help you make better shipping choices. In this article, we will clear up your confusion regarding it. Read on.
- 1. What is Air Freight?
- 1.1 History of Air Freight
- 1.2 Regulations of Air Freight
- 1.3 Usage of Air Freight
- 2. What are DDU & DDP?
- 2.1 DDU (Delivered Duty Unpaid)/DAP (Delivered at Place)
- 2.2 DDP (Delivered Duty Paid)
- 3. Conclusions
1. What is Air Freight?
Air Freight means the transportation of goods or mail via airplanes, helicopters, or other aircraft. Considered as expeditious and efficient, air freight is utilized for the transferring of valuables, fresh or live products, and precise instruments in international trade.
1.1 History of Air Freight
Air Freight began in 1871. At that time, the French in the Franco-Prussian War used balloons to transport government officials, supplies, and mail out of Paris, besieged by the Prussian army. On May 5th, 1918, airline transportation first appeared, and the route was New York-Washington-Chicago. On June 8th of the same year, regular postal flights began between London and Paris. Civil transport aircraft came into being in the 1930s, which marked a milestone in the history of teh aviation industry. After the end of the Second World War, a global network of air routes connecting the major cities of each country was gradually established.
1.2 Regulations of Air Freight
● Weight and Dimensions
The amount of air freight is normally based on actual gross weight (kilogram). If the weight is less than 1 kg, it shall be counted as 1 kg, and what exceeds 1 kg shall be half-adjusted.
Each package of cargo loaded on narrow-body aircraft generally does not exceed 80 kg in weight and 40*60*100 cubic centimeters in volume. As for wide-body aircraft, that is 250 kg and 250*200*160 cubic centimeters, respectively. The minimum sum of the length, width, and height of each package of cargo is 40 cm.
For goods exceeding the above weight or dimensions, it is necessary to consult the freight forwarder in advance about whether they can be transported.
● Volume Weight
For cargo with a volume of more than 6000 cubic centimeters per kilogram, the chargeable weight (kg) needs to be converted from the volume instead of using the gross weight directly. Generally, there are two ways for conversion:
● Volume weight = L*W*H (cubic centimeter)/6000
● Volume weight = L*W*H (cubic meter) *167
1.3 Usage of Air Freight
Air Freight is the fastest and thus the most expensive mode of transportation. It is a good option for time-sensitive or valuable goods, such as live and fresh cargo or high-priced electronics.
2. What are DDU & DDP?
Air Freight is generally point-to-point. Door-to-door service becomes possible when freight forwarding starts to play a role in international trade. Air Freight includes two common types: air DDU/DAP and air DDP, and the biggest difference between the two is whether the duties (and taxes) are paid by the buyer or seller.
2.1 DDU (Delivered Duty Unpaid)/DAP (Delivered at Place)
● DAP is a new term included in Incoterms 2010, replacing similar ones like DDU, DAF, and DES in Incoterms 2000. Although DAP has replaced DDU, it is still customary to use DDU in business contacts.
● DAP can be used for any mode of transport, and it is applicable when a couple of transport modes are combined.
● DAP (Delivered at Place) is defined in Incoterms 2010 as "the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination". Under DAP terms, the risk passes from seller to buyer at the point of destination mentioned in the contract of delivery.
● Under DAP, the seller is responsible for processing the export customs clearance. Whereas the buyer bears the responsibility of import customs clearance, other customs procedures, and all applicable duties and taxes upon cargo arrival at destination. If the buyer wants the seller to take charge as well, then DDP shall apply.
2.2 DDP (Delivered Duty Paid)
● Similar to DAP, DDP can be used for any mode of transport, and it is applicable when a couple of transport modes are combined.
● Under DDP, the seller is responsible for arranging carriage and delivering the goods at the named place designated by the buyer, and the seller assumes all of the responsibility, risk, and costs associated with transporting goods until the buyer receives them at the destination. The seller shall process the customs clearance for import and export.
● DDP places the maximum obligations on the seller and minimum obligations on the buyer.
● The buyer is not recommended to use DDP if the seller cannot obtain import permission directly or indirectly.
● Under DDP, value-added tax and other taxes on the import goods shall be paid by the seller unless otherwise agreed in the contract.
3. Conclusions
Incoterm rules define the way your freight shipping costs. You can learn about how to use DDU and DDP in air freight in order to clarify the obligations of a buyer and seller. We hope you can ship smoother after reading this. Go to our website for more freight shipping and forwarding information.
