DDP VS DDU Shipping Prices | How to choose Them?

In international logistics, DDP and DDU are commonly used terms. However, some people may not have a thorough understanding of them, which can lead to issues during the import and export process. This article aims to provide a comprehensive overview of DDP and DDU, covering the following aspects:

• What Are DDP and DDU in Shipping?
• How to Calculate DDP and DDU Prices?
• When to Use the DDP and DDU Shipping Term?
• Choosing Between Truck and Express for Door-to-Door Delivery of Your Goods

What Are DDP and DDU in Shipping?

DDP (Delivered Duty Paid) is one of the most commonly used shipping terms. It means that the seller sends goods directly to your chosen destination, such as your home, company, or warehouse. When you receive the goods, the seller has already handled all necessary importing procedures for you.

The seller is responsible for the entire shipping process to your warehouse, including payment of all costs, ensuring the safety of transportation, and bearing all the risks of loss and damage of goods during the process until the goods are delivered to you.

All you need to do is wait for your goods at your warehouse and actively assist your seller so that they can obtain the import license or other official documents required and deal with import customs clearance for you.

DDU is also door-to-door. Although it is no longer used and has been replaced by DAP (Delivered at Place) in Incoterms 2010, it is still widely used in practice. The seller will also transport the goods to the final destination and help you deal with all importing procedures except for customs clearance and paying import duties, which are your responsibility. You should also bear the additional costs and risks if you fail to pass customs clearance on time.

A Real Example of DDP and DDU

Assuming you buy 2000 cups from Yiwu, China, and plan to send them by sea to your warehouse in New York, here’s what you need to know about DDP and DDU delivery terms.

Under DDP, your seller will handle everything, including:

• Arranging trucks to send your goods from the factory to the nearest port to Yiwu, which is the Port of Ningbo.
• Handling export customs declaration, including customs inspections.
• Arranging shipping from the Port of Ningbo to the Port of New York.
• Handling import customs clearance and paying all the import duties and taxes.
• Sending your goods from the Port of New York to your warehouse.

On the other hand, under DDU or DAP, the seller will first ship your goods to the Port of New York. After you go through customs clearance, they will help you send the cargo to your warehouse. So you will need to:

• Buy customs bonds.
• Declare the goods to customs.
• Prepare and submit customs declaration documents, such as B/L, Commercial Invoice, Packing List, and Arrival Notice.
• Pay import duties and taxes when receiving the goods.

How to Calculate DDP and DDU Prices?

As we mentioned earlier, under DDP terms, the seller covers all fees from their warehouse to your destination. They will coordinate with a freight forwarder to arrange transportation, pay various fees during transit, and deliver the goods right to your doorstep. The seller will include all these costs in the quote they provide you.

For instance, say you plan to buy 2,000 cups and ship them from Yiwu to your New York warehouse. Your seller will typically inform you of the unit price of the product, say $5 per piece, and the shipping freight from Yiwu to your warehouse, say $20,000. This $20,000 covers various transportation expenses such as:

• Cost from the factory to the Port of Ningbo
• Export Customs Declaration fees
• Sea freight from the Port of Ningbo to the Port of New York
• Import Customs Clearance fees
• Customs Duties and VAT
• Costs from the Port of New York to your warehouse
• Other fees

Therefore, the DDP price from your seller is:

DDP price = $5/piece * 2,000 pieces + $20,000 = $30,000

Some sellers may distribute the $20,000 shipping fee among each product and then give you a unit price of $15, which is (5$/piece * 2000 piece + $20,000) / 2000 piece.

DDP price = $15/piece * 2,000 pieces = $30,000

If the import duties and taxes in this example amount to $3,300, then:

DDU (DAP) price = DDP price – import duties and taxes = $30,000 – $3,300 = $26,700

DDP and DDU prices involve many complicated fees. Generally, sellers do not disclose the cost of each importation and shipping process, like in the example above. If you need to know the specific fee details, you can always ask your seller.

When to Use the DDP and DDU Shipping Term?

International shipping is a complex and important part of importing and exporting. Let’s use shipping from China as an example. It involves many different parts, such as sending from the seller’s warehouse to the Chinese port, shipping from the Chinese port to your country’s port, delivering from the port to your warehouse, dealing with import and export customs clearance, and paying import duties, etc.

If you are a new buyer and don’t have any shipping resources, or if you are concerned about potential difficulties and don’t want to worry about such matters, then door-to-door shipping is a suitable option for you. When your seller is willing and able to complete import declarations and pay duties, you can choose DDP. However, when your seller is unwilling to do these things, you can choose DDU.

Additionally, if the tariffs on your goods are very high but your funds are limited, and you would prefer to pay when you receive the goods, then DDU is also a good option for you.

However, if it would be difficult and time-consuming for you to go through customs clearance in your country, we do not recommend using DDU. You may not be able to complete the customs clearance procedures in a timely and smooth manner, which could result in additional costs and a delay in delivery.

Furthermore, you can ask your seller for both the CIF price and DDP price at the same time, and choose the cheaper option. CIF price only covers the costs from the seller to the port in your country. You still have to pay the costs from the port to your warehouse and the import duties, which can be very high. Therefore, it is likely that the total costs under CIF will be higher than the DDP price. In this case, we recommend that you use DDP, which can save you time, money, and energy.

When you are deciding which shipping terms to use, be sure to calculate all of the costs involved from the seller to your hands. The costs are complicated, and you would be better off asking your seller, freight forwarder, or sourcing agent directly.

Choosing Between Truck and Express for Door-to-Door Delivery of Your Goods

When shipping goods door-to-door, there are two common options: DDP and DDU. In either case, your seller will transport your cargo to your country by sea, air, or rail, and then send it to your door by either truck or express delivery.

Let’s consider two examples: sea freight plus truck and sea freight plus express delivery. Shipping from China to the USA, the former takes about 30-40 days and costs $1.2/KG-$1.8/KG, while the latter takes about 20-30 days and costs $2/KG-$3/KG. As you can see, if both options involve sea shipping, then delivery by truck is cheaper but takes longer than express delivery.

When choosing between truck and express delivery, you should consider the volume of your goods, your time constraints, and your budget. If your cargo is less than 2CBM, then sea/air/railway freight plus express delivery is likely the best option, as there is no need to use a truck for such a small volume. For larger volumes, consider using sea/air/railway freight plus truck.

If you are an e-commerce seller, particularly an Amazon FBA seller, sea/air/railway freight plus express delivery may be a more suitable choice, as your cargo is often small and timeliness is critical.

For example, if you need to transport a small shipment from China to an Amazon warehouse in the USA, you can use a combination of sea freight and express shipping. This option is faster than traditional sea freight and less expensive than direct express shipping.

The Chinese freight forwarder will collect goods from multiple buyers, consolidate them in one container, and ship them to a warehouse in Los Angeles. Then, their partner courier company in Los Angeles will help distribute these goods to different buyers’ destinations, including your Amazon warehouse. This way, you can efficiently transport small shipments weighing around 50-100kg directly to your door.