Today, as globalization deepens, China, as one of the world’s largest commodity producers, has a booming export business. For many foreign customers, choosing to purchase goods from China has become a norm.
However, how to ensure that goods shipped from China can reach their destination smoothly, safely and quickly, while avoiding various possible taxes and additional fees, has become an urgent problem to be solved. DDP (Delivered Duty Paid), as a trade term for delivery after duty paid, provides a one-stop solution for Chinese shipments and meets the business needs of global customers.
In international trade, different trade terms (Incoterms) determine the distribution of responsibilities between buyers and sellers for transportation, insurance, duties and other costs. DDP (Delivered Duty Paid) is a commonly used international trade term, especially suitable for shipments from China to all over the world. This article will introduce in detail the definition, advantages, operating procedures and related precautions of DDP, providing comprehensive guidance for international buyers and sellers.
Definition of DDP
DDP (Delivered Duty Paid) is one of the international trade terms, which means that the seller delivers the goods at the buyer’s designated location and bears all costs and risks, including transportation costs, insurance, import duties and taxes, etc. Under DDP terms, the seller is responsible for all logistics and costs from the origin (e.g. China) to the final destination.
What is DDP Shipping from China
DDP shipping from China means shipping the goods from China to the destination without the buyer paying any additional customs clearance fees. This shipping method is especially useful for businesses looking to reduce international shipping costs. DDP shipping makes it easier for buyers to accurately calculate shipping costs and ensure they are not overpaying for customs clearance fees. This shipping method also helps businesses save time as they don’t have to worry about dealing with customs paperwork and delays.
DDP shipping is a new type of service offered by freight forwarders. It is the abbreviation for Delivery Duty Paid. This means that once the goods are delivered, the consignee is responsible for clearing customs and paying any taxes and duties.
Division of main responsibilities of DDP Shipping from China
Seller Responsibilities:
EXW (EX Works) represents the seller’s minimum obligations, and DDP represents the maximum obligations. All responsibilities, costs and risks shall be borne by the seller.
As mentioned above, the seller (exporter) is responsible for all costs involved in shipping the goods to the named destination and clearing customs in the importing country.
Sellers may also need to obtain import licenses, permits or specific payment methods and customs. If the seller is unable to obtain an import license, DDU (Delivery Duty Unpaid) should be used instead of DDP (Delivery Duty Paid).
- Packaging and labeling of goods.
- Inland transportation within China.
- Export customs clearance.
- International Transport.
- Import customs clearance in destination country.
- Pay import duties and taxes.
- Final delivery to designated location.
Buyer Responsibilities:
- Receiving goods.
Who pays customs for DDP?
Under DDP terms, all import duties and taxes are paid by the seller. This means that the seller not only needs to handle all the logistics of the goods from origin to destination, but also needs to pay all import-related fees in the destination country, including customs duties and value-added tax (VAT). This clause greatly simplifies the buyer’s responsibilities, allowing them to simply take delivery of the goods without having to worry about the complexities and fees of import clearance.
DDP Shipping Operation Process from China
- Confirm order and contract
The buyer and seller agree on the terms of the DDP and sign a contract to clarify their respective responsibilities and fees. The seller needs to know the buyer’s specific requirements, including delivery location and time. - Prepare goods
The seller prepares the goods, including proper packaging and labeling, to ensure that the goods comply with the import requirements of the destination country. - China domestic transportation and export customs clearance
The seller arranges transportation of the goods to a Chinese port or airport and handles all export clearance procedures, including submitting necessary documents and paying relevant fees. - International shipping
Goods are transported from China to the destination country by sea, air or rail. The seller chooses the most appropriate shipping method to ensure safe and timely arrival of the goods. - Import customs clearance in the destination country
After the goods arrive in the destination country, the seller is responsible for the import customs clearance procedures. This includes submitting necessary documentation, paying import duties and taxes, and ensuring the shipment complies with local regulations. - Final delivery
After customs clearance is completed, the seller arranges for the transportation of the goods to the buyer’s designated location, usually a warehouse, factory or store.
What are the methods for DDP Shipping from China?
As with normal modes of transportation, it is mainly sea freight, air freight and railway transportation.
Air Freight DDP Shipping From China
DDP air freight is a new way to transport goods from China to international destinations. This is a cost-effective and time-saving option for both suppliers and buyers. DDP Air Freight is the abbreviation of “Delivered Duty Paid”, which means the seller will bear all duties and taxes at the destination.
DPP air freight is one of the most popular transportation methods in China. Once the goods arrive at our warehouse, they will be arranged to a nearby international airport and then transported to the final destination by air freight. This can be done through freight forwarders in Hong Kong and China such as Basenton Logistics, who are responsible for:
Arrange export clearance at the departure airport (such as Shanghai or Hong Kong)
Arrange import customs clearance at the arrival airport (e.g. JFK Airport in New York, FRA Airport in Frankfurt, etc.)
Deliver goods to warehouses near the airport
Ship it to the end customer via domestic express
Now there is an emerging logistics model. In the existing international logistics model, freight and delivery are separated. Most international express companies (such as DHL, FEDEX, UPS) provide all-inclusive services with high fees. But if the process can be broken down and handed over to local express companies (such as SF/TNT/UPS), the cost can be greatly reduced.
Sea Freight DDP Shipping from China
Ocean DDP shipping is the most economical and flexible way to transport goods.
DDP Shipping involves several different shipping companies. Ocean shipping requires shipping companies to transport goods from one country to another, so door-to-door delivery services in various countries are facilitated through express companies such as UPS or FedEx.
The next step is customs clearance. In order to ship goods internationally, they must be cleared through customs in both countries. This is a complex process involving many people, but it is necessary in order to comply with international law and support the free flow of trade across borders.
Next are duties and other fees. Since the United States imposes duties on imported goods, additional charges must be paid before the goods can be delivered.
However, despite these additional costs, sea freight remains the most cost-effective mode of transportation, primarily because it takes advantage of economies of scale.
Rail Freight DDP Shipping From China
In DDP Rail Freight, e-commerce sellers are not required to provide any vouchers, VAT or EORI numbers. Customs declaration documents are actually all handled by Basenton Logistics, and the taxes and fees on them are determined by us. All you have to do is fill out the customs documents with your business account information. Once the product is in the FBA warehouse, it is ready for sale.
There are still many factors to consider when shipping goods, including transit time, cost and customer preferences. Rail shipping from China to Europe is a fast, efficient and affordable shipping method for e-commerce buyers or sellers. No additional cost.
Applicable scenarios for DDP Shipping services
DDP services are suitable for various modes of transportation, including sea transportation, air transportation, land transportation, etc. Especially for goods sent to third-party warehouses such as Amazon warehouses and overseas warehouses, it is very convenient and trouble-free to adopt the DDP double-clearance tax-packaged delivery to door logistics transportation model. In addition, for goods that require fast delivery and have high time requirements, DDP services can also provide fast and reliable transportation solutions.
In fact, the widespread use of DDP for shipping from China started with Amazon.
“Amazon will not be responsible for or charge any duties, taxes, or shipping charges associated with FBA inventory. All shipments must use Delivered Duty Paid (DDP), or sometimes called “Free Shipping” shipping terms. Any shipments to Amazon Fulfillment Goods shipped to the Center for which charges have been imposed, including any duties, taxes or freight charges, will be rejected without further concession.”
Another huge advantage is that you can take all the guesswork out of the cost of your CIF purchase. The price you pay to the supplier is the final price and includes the cost of shipping the goods in China.
Advantages and Disadvantages of DDP Shipping
Advantage
- Reduce buyer risks: Under DDP terms, buyers do not need to worry about the payment of additional fees such as customs duties and freight charges, which reduces transaction risks.
- Improve transaction efficiency: The seller is responsible for all transportation and customs clearance procedures, reducing the buyer’s operational links and improving transaction efficiency.
- Simplify trade processes: DDP terms simplify trade processes, reduce terms and dispute points in contracts, and reduce transaction costs.
Disadvantages
- Increased seller costs: The seller needs to bear all transportation and customs clearance costs, including duties and taxes, which increases the cost burden.
- Increased risks for the seller: The seller needs to be responsible for the risks of the entire transportation process, including risks of loss, damage, etc. of goods, which increases risk exposure.
- May lead to price increases: Due to the increase in seller costs, the price of goods under DDP terms may rise accordingly, affecting market competitiveness.
DDP Shipping from China to other countries
DDP Shipping from China to North America
- United States, Canada, Mexico
DDP Shipping from China to Europe
- Germany, UK, France, Italy, Spain, Czech Republic, Netherlands, Sweden, Belgium, Austria, Ireland
DDP Shipping from China to Middle East
- Saudi Arabia, UA
DDP shipping to Asia
- Japan, Australia, Singapore, Thailand, Indonesia, Malaysia, Philippines
Which countries do not accept DDP?
It is important to note that not all countries accept DDP trade terms. Some countries may prefer to use other trade terms, such as EXW (ex works), FOB (free on board), etc. due to legal, policy or cultural factors. When choosing DDP trade terms, sellers should fully understand the trade policies and customs of the destination country to avoid possible disputes or legal risks.
For international trade, it is important to know which countries do not accept DDP. There are over 90 countries that do not allow packages to be shipped via DDP. These include: Brazil, Iceland, Portugal, Nigeria, Russia, Serbia, Slovenia and Albania. Here are some countries or regions that do not accept DDP terms:
- Russia: Due to complex customs clearance procedures and high tariffs, DDP provisions may not apply.
- Brazil: High tariffs and strict customs clearance procedures make DDP provisions difficult to implement here.
- Argentina: Onerous import regulations may limit the use of DDP.
In these countries, other trade terms such as DAP (Delivered at Place) or CIF (Cost, Insurance, and Freight) may be required to simplify customs clearance and payment processes.
Why need Insurance in DDP service?
| Reasons for Insurance in Door to Door Shipping | Explanation |
|---|---|
| Financial Protection | Insurance provides financial coverage for the value of goods in case they are lost or damaged during transportation. Without insurance, the financial loss would be absorbed by the shipper. |
| Risk Mitigation | Insurance helps to mitigate the risks associated with shipping goods. These risks include damage, theft, loss, and delays due to unexpected events such as natural disasters or accidents. |
| Limited Carrier Liability | Carrier’s liability is typically limited by international conventions and may not cover the full value of the goods. Having insurance ensures you’re covered beyond the carrier’s liability. |
| Regulatory Requirements | Depending on the type of goods and the countries involved, insurance may be a regulatory requirement for shipping goods. |
| Peace of Mind | Knowing that potential losses are covered by insurance gives peace of mind and allows the shipper to focus on other aspects of their business. |
Things to note about DDP services
Understand the laws and regulations of the destination country: When providing DDP services, the seller needs to understand the laws, regulations and customs requirements of the destination country to ensure that the goods can clear customs smoothly.
Fully communicate with the buyer: The seller needs to fully communicate with the buyer and clarify the DDP terms and related responsibilities and obligations to avoid disputes during the transaction.
Choose the right logistics partner: Sellers need to choose the right logistics partner to ensure that the goods can reach the destination safely and quickly. Basenton Logistics has rich experience and professional knowledge to deal with various problems that may arise.
Summarize
To sum up, DDP service, as a trade term for delivery after duty paid, provides a one-stop solution for Chinese shipments and meets the business needs of global customers. By understanding the definition, characteristics, operating procedures, advantages, applicable scenarios and precautions of DDP services, we can better understand and apply DDP services and provide strong support for the smooth development of international trade.
Choosing DDP transportation can simplify complex international trade processes and make transactions more transparent and reliable. We hope this guide provides you with valuable information to help you succeed in international trading.
