International shipping can be confusing, especially when it comes to trade terms like DDP, DDU, and DAP. These Incoterms define who is responsible for customs clearance, import duties, and transportation costs. In this guide, we break down the key differences between DDP, DDU, and DAP to help you choose the best option for your cross-border shipments.
What is Delivered Duty Paid (DDP)?
Delivered Duty Paid (DDP) is one of the most comprehensive international trade terms where the seller assumes full responsibility for delivering the goods to the buyer’s designated location, covering all the risks and costs along the way.
This includes:
Transportation costs
Export and import duties
Customs clearance procedures
Local taxes and import fees
Final delivery to the buyer’s country
In DDP shipping, the risk transfers from seller to buyer only after the goods have arrived at the final destination. The buyer does not need to handle customs brokers, pay import taxes, or manage any shipping-related issues.
When to Use DDP
The buyer prefers a turnkey solution and doesn’t want to deal with customs clearance or local regulations.
The seller has strong logistics partners or a freight forwarder who can manage delivery in the destination country.
Ideal for B2C e-commerce, sample shipments, or buyers without a registered company.
Example:
A U.S. customer buys electronic gadgets from a supplier in China. Under a DDP agreement, the seller covers all shipping costs, pays import duties, handles customs clearance, and delivers the goods directly to the buyer’s address in the USA.
What is Delivered Duty Unpaid (DDU)?
Delivered Duty Unpaid (DDU) is an older international trade term in which the seller covers transportation costs and delivers the goods to the destination country, but the buyer is responsible for customs clearance, import duties, local taxes, and any associated costs upon arrival.
While DDU has been officially replaced by DAP in the latest Incoterms, it is still widely used in international trade contracts and daily shipping arrangements.
Key Features of DDU:
Seller handles export process and international transportation.
Buyer assumes all responsibility after goods arrive in the destination country.
Buyer must manage customs clearance, hire a customs broker, and pay import taxes or customs fees.
Risk transfers at the point where the goods are delivered to the port or airport in the buyer’s country.
When to Use DDU:
The buyer has local experience and prefers to handle customs issues directly.
Shipping to countries where customs clearance procedures are complex or regulations vary.
The buyer wants to control import formalities and potentially reduce import duties through their own channels.
Example:
A business in Germany orders clothing from a manufacturer in China under DDU terms. The Chinese seller ships the goods to Hamburg but does not pay import duties or customs clearance fees. The German buyer is notified when the shipment arrives and must arrange handling customs clearance.
What is Delivered At Place (DAP)?
Delivered At Place (DAP) is a modern Incoterm that replaced DDU in the official International Chamber of Commerce (ICC) guidelines. Under a DAP agreement, the seller delivers goods to a specified location in the buyer’s country, covering all transportation costs up to that point. However, the buyer is responsible for paying import duties, local taxes, and completing customs clearance at the final destination.
Key Features of DAP:
Seller handles export customs and covers all transportation expenses until goods arrive at the designated location.
Buyer assumes responsibility for import formalities, including customs clearance, customs duties, and VAT or local taxes.
The risk transfers once the goods are ready for unloading at the agreed destination.
When to Use DAP:
When the seller wants to manage logistics but leave import responsibilities to the buyer.
Useful when delivering to the buyer’s country but not directly to their warehouse or facility.
DAP is common in B2B international trade where buyers often have customs handling capacity.
Example:
A UAE importer purchases lighting equipment from a Chinese exporter under DAP terms. The Chinese seller ships the goods to the Dubai port and pays for international freight. However, the UAE buyer is responsible for paying import duties, managing customs clearance, and arranging for final delivery from the port to their warehouse.
DDP vs DDU vs DAP: Key Differences Compared
When choosing between DDP, DDU, and DAP, it’s crucial to understand who is responsible for covering transportation costs, handling customs clearance, and paying import duties. he table below provides a clear comparison of these three trade terms in international shipping:
Side-by-Side Comparison Table
| Aspect | DDP (Delivered Duty Paid) | DDU (Delivered Duty Unpaid) | DAP (Delivered At Place) |
|---|---|---|---|
| Customs Duties & Taxes | Paid by Seller | Paid by Buyer | Paid by Buyer |
| Customs Clearance | Handled by Seller | Handled by Buyer | Handled by Buyer |
| Transportation Costs | Covered by Seller | Covered by Seller | Covered by Seller |
| Risk Transfers | At Buyer’s Location (Final Delivery) | At Entry Point in Buyer’s Country | At Destination Point (Before Unloading) |
| Buyer’s Responsibility | None (except receiving the goods) | Pay duties, clear customs | Pay duties, clear customs |
| Seller’s Responsibility | All-inclusive | Shipping only | Shipping to agreed point |
| Best For | B2C, small importers | Experienced importers | B2B, partial logistics support |
Summary of Key Differences
DDP gives the maximum responsibility to the seller. It’s best when the buyer wants a stress-free solution.
DDU shifts customs and tax responsibility to the buyer and is now considered outdated, though still used informally.
DAP is the modern alternative to DDU, suitable for buyers who can handle import formalities but want shipping support.
Choosing the right term depends on who has the expertise, customs resources, and logistics capabilities to manage the shipment efficiently.
Which Trade Term Should You Use in 2025?
Choosing between DDP, DDU, and DAP depends on your role in the transaction, the nature of your goods, and your capacity to handle customs clearance and import duties in the destination country. Below are some key considerations for selecting the right term:
Use DDP If:
You’re shipping to individual customers or small businesses unfamiliar with international logistics.
Your buyer prefers to avoid dealing with customs brokers, import formalities, and unexpected costs.
You want to offer delivered duty paid pricing with clear final delivery and no extra charges upon arrival.
Ideal for: B2C e-commerce, samples, sensitive or high-value goods
Seller must manage: customs regulations, import fees, local taxes
Use DAP If:
Your buyer is experienced with import clearance and has a customs broker in their country.
You want to control shipping and export, but not take on import responsibilities.
There is no need to deliver all the way to the buyer’s warehouse, just to the agreed specified location (e.g., seaport, bonded zone).
Ideal for: B2B shipments, cross-border wholesale, regular trade lanes
Buyer handles: customs duties, import taxes, delivery from port
Use DDU If:
You and your buyer still use informal trade agreements based on older terms.
You want a simpler alternative to DAP, even though it’s no longer officially recognized.
Note: DDU is outdated and may not be accepted in formal contracts governed by the International Chamber of Commerce. It’s better to use DAP for legal clarity.
Final Tips:
Discuss Incoterms clearly in your sales contract to avoid disputes over financial responsibilities.
Use DDP when you want to provide a frictionless delivery experience.
Use DAP or DDU when the buyer prefers control over import costs or customs.
FAQ: Common Questions About DDP, DDU, and DAP
What is the main difference between DDP and DAP?
DDP (Delivered Duty Paid) means the seller is responsible for all costs and risks, including import duties, customs clearance, and final delivery. In contrast, DAP (Delivered At Place) requires the buyer to handle import formalities and pay local taxes once the goods arrive at the designated location.
Is DDU still valid in international shipping?
DDU (Delivered Duty Unpaid) is no longer an official Incoterm under the International Chamber of Commerce, but it is still informally used in contracts and by some freight forwarders. For formal agreements, it’s recommended to use DAP shipping instead.
Who pays the import taxes in a DAP shipment?
In DAP, the buyer pays all import taxes and customs duties, while the seller handles transportation costs up to the destination country. Risk transfers when the goods are delivered, but customs clearance is the buyer’s responsibility.
What are the buyer’s responsibilities under DDU?
In a DDU agreement, the buyer assumes full responsibility for handling customs issues, hiring a customs broker, and covering all import fees and local regulations after the shipment arrives in their country.
Why do some sellers prefer DDP?
Sellers use DDP shipping to offer a seamless buying experience. It reduces communication delays and ensures the goods arrive without customs delays, making it ideal for international e-commerce and delivered duty paid contracts.
Does DDP include insurance coverage?
DDP terms do not automatically include insurance coverage unless explicitly agreed upon in the sales contract. However, since the seller bears all the risks until final delivery, they usually arrange coverage to protect the shipment.
Need help with DDP or DAP shipping from China? At Tonlexing, we offer flexible trade term support, including door-to-door DDP solutions, DAP deliveries, and expert customs clearance assistance for international buyers.
Contact us to get a tailored shipping solution today.
