“DDU GUIDE
What is Delivery Duty Paid (DDU Incoterm)?
DDU Incoterm is the abbreviation of “”Delivered duty unpaid””, which is an international trade term (incoterm), which means that the seller will deliver the goods for import immediately after the goods arrive at the agreed place in the destination country.
Seller’s Obligations in DDU Shipping
As I said, DDU shipping has a huge impact on the seller’s liability.
these are:
1. Provide goods according to the contract
The seller must provide a soft copy of the goods and a commercial invoice or equivalent in accordance with the contact terms.
He/she should also provide any other documents the contract may require to determine whether the goods conform to the contract.
2. Licenses and Permits
Seller must bear the risk and expense of obtaining rights licenses and other export documents.
He/she must also carry out all customs formalities required for the export of goods and transit through countries that require customs formalities.
3. Transportation
The seller must bear all risks and expenses of transporting the goods from the country of origin to the named destination.
If the buyer does not give a designated place, the seller is free to choose a suitable destination for delivery of the goods.
4. Delivery of goods
The seller must deliver the goods to the buyer or other person designated by the buyer at the selected location on the agreed date.
Please note that the seller still assumes all delivery risk.
5. Risk transfer
Unless otherwise stated, the seller must bear the risk of loss of or damage to the goods until the named point of delivery.
6. Cost division
The seller must bear all costs incurred for delivery at the agreed place and time, as well as customs charges before delivery at the designated place.
7. Notify buyers
The seller must give sufficient notice to the buyer of the goods.
He/she must also inform the buyer of any other information related to the delivery of the goods.
8. Proof of Delivery and Shipping Documents
The seller must provide the buyer with the bill of lading and required shipping documents at its own expense.
and any other relevant documents required to receive the goods upon delivery.
These other documents include;
negotiable bill of lading
non-negotiable sea waybill
air waybill
railway bill
road order
Please note:
If the parties agree to provide documents electronically, all of the above shall be replaced by their respective EDIs.
EDI (Electronic Data Interchange) also applies in this case.
9. Inspection, packing, marking
The seller must bear all costs of checking the quality and quantity of the goods, as they shall comply with the terms of the sales contract.
The seller must also provide the correct packaging of the goods at its own expense.
Please note, however, that some items may be delivered unpackaged according to industry practice.
If this is the case, the seller may waive this obligation.
other obligations
The seller can assist the buyer in obtaining any orders required for import clearance in the country of destination.
Seller must obtain and provide Buyer all relevant shipping documents at Seller’s expense and risk.
In the case of insurance, the seller must provide all documents required to obtain coverage.
Alternatively, it may be transmitted electronically if the buyer agrees.
Well, that’s about the seller’s obligations in DDU shipping.
Buyer’s Obligations in DDU Shipping
1. Pay the purchase price
The buyer must pay the agreed DDU payment in accordance with the contract.
2. Licenses and Permits
Buyer must obtain any import licenses and any other licenses required for customs clearance at its own risk and expense.
He/she should also handle all necessary customs formalities in the importing country.
3. Receipt
Once the seller has delivered the goods at the agreed place, the buyer must receive the goods.
He/she can receive the goods in person or designate someone else to do it.
The latter must be stated in the contract.
4. Risk transfer
After the goods have been delivered at the designated place, the buyer must bear all risks of damage or loss of the goods.
Please note that it is the buyer’s responsibility to notify the seller of the appropriate place and time of delivery.
Failure to do so will cause the buyer to assume all shipping risks and liabilities from the date of agreed delivery or expiration of the delivery period.
Furthermore, if the buyer does not obtain the necessary documents, he/she shall bear the consequences that follow.
5. Cost division
Buyer must pay all charges incurred from the date of delivery of the goods to the named destination.
He/she shall also bear all costs of customs clearance in the importing country and other costs related to the goods from the date of delivery.
6. Notify the seller
Buyer reserves the right to determine a suitable delivery time and place.
This is because DDU requires the buyer to give sufficient notice to the seller within the agreed period.
7. Proof of Delivery and Shipping Documents
The buyer must receive all shipping documents provided by the seller as long as they comply with the contract of sale.
And, if agreeing to use electronic transmission to provide the documents, the buyer is ready to receive them.
8. Cargo Inspection
If the buyer organizes any pre-shipment inspections, he/she must pay all fees.
However, the buyer is not obliged to bear any costs associated with inspections prescribed by the authorities of the exporting country.
other obligations
Like the seller, the buyer in a DDU contract must pay all costs incurred in obtaining import documents.
He/she must also reimburse the seller for assisting in obtaining the above documents.
Compare DDU vs DDP shipping. what’s the difference?
First, let’s define two Incoterms.
DDU – Unpaid Delivery Tax
Seller is responsible for all charges other than any unloading charges, import duties and/or duties levied by customs upon arrival of the goods. These fees must be paid by the recipient before they can be released and delivered.
It may be cheaper for suppliers to ship using DDU, but if they don’t make it clear that they will pay certain fees when the goods arrive, they risk angering customers. For example, if the customer refuses to pay the fee, the supplier will have to pay extra for the goods returned from customs.
Please note that the DDU shipping terms are the old incoterm and have been replaced by DAP (Delivered On Site) in the 2020 listing.
DDP – Delivery Duty Paid (Designated Destination)
Seller pays all costs involved in shipping the goods to Buyer, including import duties and taxes. Seller is not responsible for unloading. This clause places the greatest obligation on the seller and the least on the buyer.
As you can imagine, DDP fees are higher because they include all shipping, customs clearance, and freight at the port of load and destination, especially duties and taxes that are prepaid to the logistics provider and not included. DDU.
The benefit of DDP shipping is that buyers will know that they will not owe any additional customs charges when the goods arrive, so it is a more streamlined delivery method that is less likely to cause any confusion or dissatisfaction.”
