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What is Delivered Duty Unpaid (DDU) in export trade?

Delivered Duty Unpaid (DDU) is an international trade term that means the seller is responsible for cost and risk associated with goods during shipment. Learn more about it in this blog.

During international shipping, multiple licenses and documents need to be obtained. In this process, exporters might come across various trade terms – one such is ‘Delivered Duty Unpaid’ (DDU).

What is Delivery Duty Unpaid?

DDU is a type of international trade term or shipping method in which a seller (exporter) fulfils the obligation to assure safe delivery of goods to a pre-determined location, pays applicable shipping charges and bears costs and risks associated with goods during shipment, aside from import duties once it arrives at the final destination. When goods arrive at the agreed-upon final destination, the responsibility for customer’s payment and other obligations is transferred to buyer (importer)¹.

Obligations under Delivered Duty Unpaid (DDU)

Exporter’s responsibilities

• Presents goods and commercial documentation required by the sales contract
• Organizes export clearance and other requirements
• Arranges and pays for transportation costs to the designated destination
• Assumes responsibility for goods until they are delivered to the importer buyer at the agreed-upon location.
• Provide transportation paperwork to the importer to take ownership of goods

Importer’s responsibilities

• Pays for goods in accordance with the sales contract
• Responsible for obtaining necessary business papers, permits, and authorizations, as well as arranging for import clearance and formalities
• Takes control of goods once it is delivered to the stated location
• Recognizes all risks involved with the goods from the time they are made accessible at the specified location
• Responsible for transportation expenses, import customs procedures, duty fees, and other formalities and charges involved with the transit of cargo²

Advantages and disadvantages of Delivered Duty Unpaid (DDU)

The fundamental advantage of DDU shipping is that it gives the importer more control over shipping operations. For example, monitoring costs and tracking shipments are often easier with DDU shipping. Thus, importers are more informed. In DDU shipping, the exporter is responsible for sending goods to their destination, while the importer handles any legal issues.

One of the significant challenges for importers is the likelihood of unexpected customs or tax penalties when goods arrive. In DDU, the exporter must be well acquainted with relevant formalities in the destination country so they can make arrangements with foreign agencies. This might result in shipment delays and errors, which can cost both parties time and money.

Difference between Delivered Duty Unpaid (DDU) and Delivered Duty Paid (DDP)

In the world of shipping, Delivered Duty Unpaid indicates that the importer is responsible for any customs charges, levies or taxes imposed by the destination country. In contrast, Delivered Duty Paid (DDP) denotes that the exporter must pay any customs charges, tariffs, and/or taxes that may be imposed to transport goods to the destination country³.

Understanding international logistics process helps Indian businesses be export-ready and complete hassle-free shipping. With e-commerce exports, both exporting and international shipping have become easier and simpler than before.

Easy e-commerce exports with Amazon
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Amazon Global Selling is an e-commerce exports program that helps you take your business from India to global markets across 200+ countries and territories including America, Europe, the Middle East, and Asia-Pacific. Whether you are a multi-city store, local seller, upcoming startup or a seasoned exporter, irrespective of your business size, you can export from India and establish your business on the world map.

Frequently Asked Questions

Who is responsible for DDU shipments?

Under DDU shipping regulations, the exporter is responsible for delivering goods to the destination country till unloading. The importer is responsible for the risk and cost of unloading.

Which shipping is better – DDU or DDP?

Each mode of shipping has advantages and disadvantages and depends on the parties involved expect from their shipping experience.

Published on November 30, 2022.

Sources:
1. https://www.investopedia.com/terms/d/delivereddutyunpaid.asp
2. https://www.tradefinanceglobal.com/freight-forwarding/incoterms/ddu-incoterm-delivery-duty-unpaid/
3. https://www.marineinsight.com/maritime-law/ddp-ddu-shipping-terms-explained/
4. https://cleartax.in/g/terms/delivered-duty-unpaid-ddu

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