What is Door-to-Door Delivery with Clearance? What’s the Difference Between DDU and DDP?
Before distinguishing between the two, let’s clarify a concept: what is “Door-to-Door Delivery with Clearance”?
“Clearance” refers to customs clearance. “Double clearance” means a series of processes including customs declaration at the origin and at the destination. “Door-to-Door” means delivery to your door. Door-to-door delivery with clearance utilizes various modes of transportation, connecting sea and land, encompassing domestic and international customs clearance, export, import into the destination country, and taxes—a one-stop logistics service from start to finish. In simpler terms, you entrust your goods to a freight forwarding company, which is responsible for arranging trucking, customs declaration, container loading, and ship or vehicle matching. Upon arrival at the destination, the freight forwarder also arranges document exchange, customs clearance, and door-to-door delivery. This process is what we commonly call “Door-to-Door Delivery with Clearance.” Do you understand?
DDU and DDP are two professional trade terms frequently used in the import and export of goods.
DDU (Delivered Duty Unpaid): Delivery without duty (named destination) means that the seller delivers the goods to the buyer at the named destination in the importing country without completing import formalities or unloading the goods from the means of transport.
The seller bears all costs and risks up to the named destination, excluding any import duties (including the responsibility and risk of customs formalities, and the payment of fees, customs duties, taxes, and other charges) payable at the destination if customs formalities are required. The buyer must bear these duties and risks, as well as the costs and risks arising from their failure to promptly clear the goods through customs.
DDP (Delivered Duty Paid): Delivery with duty paid in the importing country (named destination) means that the seller delivers the goods to the buyer at the named location in the importing country, while the goods are still on the means of transport. The seller is responsible for import customs clearance and payment of any import duties payable at the destination if customs formalities are required.
The seller bears all costs and risks before delivering the goods to the buyer. This term should not be used if the seller cannot obtain an import license directly or indirectly. DDP is the trade term where the seller bears the greatest responsibility.
DDP and DDU generally only apply to situations where missing or damaged goods are caused by the seller. Under normal circumstances, the buyer will not request DDP or DDU from the seller because the seller, as the foreign party, is unfamiliar with the domestic customs environment and national policies, inevitably incurring many unnecessary costs during customs clearance. These costs will ultimately be passed on to the buyer, so the buyer usually only agrees to CIF.
So, under what circumstances would a customer choose DDP terms?
Customers who are importing for the first time or are new to the industry are not very familiar with transportation, customs, and other related aspects, so they rely on the exporter to handle these processes.
Some customers, especially some French customers, are unwilling to handle these trivial matters and simply entrust them to the exporter.
Other customers choose DDP to reduce import risks, especially for goods susceptible to import restrictions, tariffs, or trade barriers. DDP terms transfer this risk to the exporter.
In fact, the biggest difference between the two lies primarily in who bears the risks and costs during the import customs clearance process at the port of destination. If the exporter is capable of completing import customs clearance, then DDP can be chosen. If the exporter is unable to handle the relevant matters, or is unwilling to handle import procedures and bear the risks and costs, then DDU terms should be used.