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DDU - Delivered Duty Unpaid

DDU- Delivered Duty Unpaid

DDU or “delivered duty unpaid,” is a commonly used incoterm. International Commercial Term is a set of incoterms defined by International Chamber of Commerce to clearly define the international shipping terms and responsibilities between the buyer and the seller.

What is DDU Incoterm?

DDU Incoterm refers to the condition that the seller must deliver the ready merchandise to the decided location in the country where they are imported.

While in case of DDP (delivery duty paid), the seller is liable to pay for the delivery costs to deliver the consignment to the buyer’s location, DDU makes sure that the buyer takes the responsibility of delivery costs and even physical delivery cost, after agreement for shipment is signed.

However, DDU may include additional charges such as customs charges to be paid by the seller if it is mentioned in the agreement with buyer.

Seller’s responsibility

  • The seller should deliver the goods along with all the essential documents to support buyer’s authority to take possession of the goods.
  • Any documentation such as license etc. to shipthegoods to the buyer’s location shall be arranged by the seller.
  • It is the seller’s responsibilityto bear the risk of any accidental loss, damage, or theft of the goods until they possessed by the buyer. However, insurance is not required.
  • The seller shall make the arrangements to deliver the goods on the agreed location on the port of origin alongside the ship.
  • Once the goods delivered at the agreed-upon location of the destination country, the risk is transferred from the supplier to the buyer.
  • The supplier shall pay for the delivery expenses to the destination location, labour, loading, and transportation costs until agreed location, insurance (optional), and export duties and taxes.

Buyer’s responsibility

  • The buyer pays the cost of delivered goods.
  • The buyerwill pay for the expenses for getting all the essential documentation such as official authorization for the important clearance after the goods have arrived at their agreed upon location.
  • Once goods have reached the agreed-upon location, the buyer will bear all the costs incurred in shifting the goods to their storage, customs duties and other fees involved. Also, they will be responsible for any damage, loss or theft to the goods. It is advised totake insurance to bear the risk.
  • Once the goods arrive at the agreed-upon location, the buyer should take possession of the goods.
  • Once goods reach the destination, there is transfer of risks from the seller to the buyer. However, if there is any delay, or the vessel does not show up; the buyer can cover anyadditional expense from the seller.
  • The buyer will pay for import and customs duties andtaxes in their country, unloading costs, and shifting costs of the goods from the post to their storage facility.
  • The buyer should sign the deliverydocument and provide receiving time to show the proof and notice.

Advantage of DDU

  • The seller is responsible for all the costs and risks associated with the shipment of goods until they reach the agreed point in the destination country. Once the buyer takes the delivery in their country, it is buyer’s responsibility after that. It is the most feasible arrangement for both parties because the buyer is well versed with the formalities and laws of their country, while it is difficult for the seller to understand rules of a foreign land.
  • Tracking of shipments is very easy in one’s own country than in a foreign nation. So both the parties can easily track their shipment in their own countries.

DDU helps to divide the risk of delivery between buyer and seller, almost equally.