Role of DDP shipment in logistics

The paperwork, cargo, and capital pass through different hands, intermodal points, and countries while importing goods from across the border countries. Ensuring the correct paperwork and delivery duty paid (DDP) is an extremely crucial part of the process.

While importing goods from China, there are certain risks present in logistics that can complicate the things between the buyer and the seller. At such a point, DDP shipment comes to use.

What is a DDP shipment?

The International Chamber of Commerce (ICC) has the authority to decide which parties are responsible for the varied aspects of managing shipping, insurance, and logistics. The trade terms issued by ICC are accepted worldwide and standardize the vital aspects of international shipping. It helps in mitigating the potential risks (damage, loss, or theft) during cross-border transport.

DDP is an Incoterm that stands for “delivery duty paid.” It is mainly used in sea freight and air freight importing. It makes sure the seller is responsible for all payments until goods are delivered at the terminal at the agreed-upon port of shipment.

DDP can be risky for sellers as they bear the maximum responsibility during import & export and carry out all the customs formalities. There are chances where they may lack local destination knowledge and requirements, especially when factories in China quote DDP.

When is DDP shipment used?

You can use the DDP in any and across multiple modes of transport, especially when the cost of the full supply chain is stable and easily predictable. It works best when the seller has local knowledge of the country of destination or if the import clearance is pretty simple.

Sellers are subjected to paying a lot of fees, including delays, customs, value-added tax (VAT), etc. Therefore, DDP should be used when the risk is low. It’s better to determine all payment and delivery details before to avoid the chances of unexpected delays or discrepancies. Your shipment might get delayed if the DDP is not accurately handled.

Go ahead with DDP only when you have trust in the supplier and freight forwarder. If your supplier quoted you DDP and you want to know how much you can save by allowing Guided Imports to act as your logistics company, you must get a shipping quote.

Being an established China sourcing agent, Import2India takes care of all these formalities to avoid the potential risks of import.

Prime benefits of DDP shipment

In DDP, there is so much responsibility on the seller. He has to do a lot of work – accurately estimating the cost of the shipment, clearing it through customs, and getting it delivered to an agreed-upon location. The risk is generally low on the buyer’s side.

Here are some of the benefits you get while importing goods from China in DDP shipment:

  • You are not responsible for any delivery costs, taxes, or surprise charges of any kind that takes place during the shipping and delivery process.
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  • While purchasing goods on DDP terms, you don’t have to bear the risk of high inspection fees. Even if it happens, the bills go to the seller.
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  • Once the products are shipped, you simply need to wait for their cargo to arrive and accept it. This takes away a lot of stress.
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  • No need to calculate additional shipping costs from China to India.
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  • You can structure the purchase agreement at your convenience and reduce the risk of shipping delays and unqualified logistics companies.

FAQs

A DDP agreement is a useful option if you are happy to pay a premium for low-quality shipping and do not want to split the cost of your purchase between your supplier and us. There are other ways to ship from China, such as FOB. It is comparatively less expensive and has less risk of shipping delays and uncontrollable issues.

DDP Incoterms vary. A seller can request any payment terms for their order. In China, some factories will require you to pay the full amount once the goods are on the boat. On the other hand, others will ask for final payment once the goods have cleared customs.
At Import2India, we help you find the best way to receive your cargo.