International Shipping Tips: Understanding Delivery Duty Paid Shipping
What is Delivery Duty Paid Shipping
Delivery duty paid or DDP, as it is commonly known, is a global shipping and delivery approach where the business—who has to send goods to a customer—pays for all the fees and covers all the risks until a package reaches its endpoint.
In essence, it is a shipping technique created by the International Chamber of Commerce to regulate and bring order to the shipment of items across the globe.
DDP is a common method among businesses or organizations looking to transport items across borders through cruise or air. But the customer enjoys most of the advantages because they take less responsibility and accountability in terms of shipping charges among other related costs.
The sender, in this case a company, takes a bigger risk and profits may go down if the unexpected occurs in transit.
Plus, because of the complex shipping rules that control the sending of items internationally and the fact that every nation has its unique list of rules and regulations for exports, Delivery Duty Paid shipping is most appropriate for top-dollar goods items— many times an AOV of 30 dollars or more.
How DDP differs from DDU (Delivery Duty Unpaid)
DDP is different than DDU in that the latter requires the recipient or the customer to sort out all the duties tied to a parcel once it arrives its “ship-to” nation.
For Delivery Duty Unpaid, the recipient receives a notification once their goods reaches customs offices, and the buyer has to walk to a domestic carrier office to collect it.
Many times, buyers do not notice DDU or their order and reach out to a retailer’s customer service department, call off the order, or reject it and asks the carrier to a return-to-dispatcher.
So for ecommerce business who prioritize shopper experience, Delivery Duty Paid is known to offer better CX because a retailer does everything upfront— the buyer only waits to collect their shipment.
But it is still an appropriate method for businesses because a retailer can choose to offset those charges by raising shipping costs— so that the shoppers pays those fees upfront.
The Critical Role of Delivery Duty Paid
This global standard for moving freight across borders is built to protect consumers. DDP lifts liability off the back of a shopper, making it easier for clients to buy items without the fear of paying exorbitant prices and taxes.
Discover the critical role of this approach in ensuring successful cross-border ecommerce.
- Guarantees safe movement of cargo through air or cruise: Scheduling and planning air and sea shipments can be a hassle for a retailers. DDP pushes a retailer to complete an order because failure to do so may mean serious losses.
- Consumer protection: This standard protects the consumer, reducing the chances of getting ripped off. Because a retailer covers all related fees, risks and shipping costs, they must work to make sure the ordered items reach their shoppers.
- Safe international deliveries: Without a standard that regulates how we send goods, it can be difficult to nail global shipping. Varying regulations from nation to nation can make cross-border sipping too complex. Delivery Duty Paid prompts a seller to search for the safest and fastest way to ship.
- Holds senders or businesses accountable for global shipping fees: DDP streamlines global shipping by ensuring all international shipping costs are cleared upfront. Shoppers are often unwilling to deal with such costs so without DDP cross-border shipping would be a hassle.
Delivery Duty Paid fees a Business Should Watch Out For
As mentioned earlier, the sending party pays all related shipping fees, related charges, plus taxes. So what are these fees a business should expect when sending items through DDP?
Here’s a list of all the
1. Freight Charges: Moving cargo across borders can be difficult, more so if you have to use air or sea. Global shipping rates vary from one courier service to the next.
2. Import/export duties: These are all fees payable at customs to authorize imports and exports which may vary depending on your destination nation.
3. Value Added Tax: The sender is manadated to pay for VAT if they choose to use this approach. But they can discuss the transfer of these fees to the customer (and make these changes with the shopper’s consent.)
4. Insurance fees: while insurance fees are optional, a retailer may need to insure high-value packages to minimize risks.
5. Damage fees: A retailers must also pay for any mishandling or damage that happens to a product. The seller must do the replacement and pay all related fees.
6. Stowage & Demurrage Costs: All customs authorization charges incurred due to shipping delays.
Always use Delivery Duty Paid wisely. Take time to confirm any other related fees upfront to avoid unexpected costs. Also, make sure to include all these costs in the product’s price to offset these fees and remain profitable.