DDU – Delivery Duty Unpaid – Is a fairly common incoterm and can be used for any mode of transport. Under DDU terms the seller is responsible for making the goods available to the buyer at a named place of destination but not cleared for import. The seller is also responsible for all the costs involved to deliver the goods to the named place of destination. The seller’s risk also does not end until it reaches the names place of destination.
A common misconception with DDU is that the seller is also responsible for the inland transport of the goods to their final destination after the buyer has arranged for import clearance. This is incorrect. The buyer assumes all risk and responsibility for the import clearance, duties, and delivery to final destination.
Under DDU terms the seller’s risk and responsibility end once the goods have been made available to the buyer at the named place of destination. The seller is also responsible for all costs up to the named place of destination, but is not responsible for delivering the goods to their final destination.
Seller’s responsibilities:
1) Produces the goods and commercial documents as required by the sales contract.
2) Arranges for export clearance and all export formalities.
3) Arranges and pays for all costs for the transportation of the goods up to named place of destination.
4) Assumes all risk to the goods (loss or damage) up to the point they have been made available to the buyer at the named place of destination. SPECIAL NOTE: Under DDU terms the seller is under no obligation to provide insurance. However, he may have a vested interest in the goods during the voyage. It may be a wise decision to purchase additional insurance coverage in the case of a loss.
5) Seller must advise the buyer that the goods have been delivered to the carrier and the appropriate arrival information.
6) Seller has to provide the buyer with transport documents that will allow the buyer to take possession of the goods at the named place of destination.
Buyer’s Responsibilities:
1) Buyer must pay for the goods as per the sales contract
2) Buyer must obtain all commercial documentation, licenses, and authorizations required for import and arrange for import clearance and formalities at own risk and cost.
3) Buyer takes delivery of the goods after they have been delivered by the seller to the named place of destination.
4) Buyer must assume all risks for the goods from the time the goods have been made available at the named place of destination.
5) Buyer pays for all costs of transportation, import customs formalities and duty fees, and all other formalities and charges related to the transportation of the shipment from the time the goods have been made available at the named place of destination.
6) Buyer would accept the seller’s transport documents provided they conform with the sales contract and will allow the buyer to take possession of the goods after delivery to the named place of destination.
Did you find this post useful? Then check out our complete overview of Incoterms 2000.
This interpretation is provided as a guide only.
Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.
We had customer sales contract called for DDU term and destination is our customer factory address.Am i right to say seller responsible to sent shipment till port of dischage,buyer to provide import license and authorisation letter and seller to continue sending shipment to buyer premise?
who pays the Custom Duty in the case of DDU shipment?
to: NASEER:
“The buyer assumes all risk and responsibility for the import clearance, duties, and delivery to final destination”
Who pays destination port charges & carrying cost from destination port to buyers warehouse under DDU terms ?
If DDU term calls for delivery to project site, then isn’t seller responsible for local transportation from custom-clearance point to project site?
Hi, am working as a Logistics associate in an MNC B’lore. In my company we normally charge the customs clearance charges to supplier for DDU shipments as per my knowledge and my higher officials also taught me that supplier has to pay customs clearance charges at destination for DDU shipments. But many suppliers are showing me some internet records and saying that buyer has to pay this charge. Please clarify is it right
Hi Velu ,
If the terms is DDU then your supplier are right in saying , DDU terms the seller is responsible for making the goods available to the buyer at a named place of destination but not cleared for import.If the terms are DDP then custom clearance is supplier’s responsibility .
I have a buyer from Slovenia. They are asking us accept the terms of payment by DDU ? As till today, our company never try to used this terms of condition. Could you please let me know whether this terms DDU is saved or not ?? Or can somebody let me know more clearly ??
Many thanks & Regards
Henry Lim
Henry Lim – Not sure what you mean by “whether this terms DDU is saved or not”. I can tell you that it is a pretty commonly used incoterm. The thing to remember is that under DDU terms most of the risk and responsibility is on you, the seller. Are you comfortable being responsible for the product up to the named place of destination? Your costing to your customer should include all the costs necessary to get the product (excluding customer clearance and duties – that’s for the buyer) to the named place of destination.
If you are not comfortable selling under these terms, then negotiate different terms with your buyer.
Manglani – strictly speaking final delivery is the buyer’s responsibility under the official definition, but you and your buyer can negotiate this point. I see this all the time, where the buyer or seller agree on DDU terms with the named place of destination being the final delivery location with the buyer. Again, technically speaking, final delivery is the buyer’s responsibility, but some companies agree to include final delivery under DDU terms.
Shah Alom – based on my understanding of DDU terms the seller would be responsible for destination port charges but not the final delivery from the port to the buyer’s warehouse.
Hi!
We just received a shipment to our location in Sweden (250km from border) from out supplier in Turkey.
Condition was DDU.
We have been buying from this supplier for many years.
However they changed forwarder – and truck driver passed Swedish border without any stop at customs (He passed late evening at midsummer holiday).
Saturday he showed up at our factory – but no stamps from customs border – also not all documentation – 1 ATR document missing .
Since driver spoke nothing but Turkish language + maybe 10 german words, and forwarder had no agent in Sweden, we could not arrange everything until tuesday evening.
We are furious with our supplier since these days cost us a lot of business – we could not deliver in time for our customers ads in newspapers.
I wonder if it is legal to enter a country as the driver did carrying a truck of commercial goods and park in our yard and more or less leave the problems to us top sort out?
Did supplier technically deliver correct?
Peter – I find it amazing that the driver managed to cross the border without declaring anything at all to anybody, despite the fact that it was late evening and a holiday. I have zero knowledge of Swedish Law, but I would imagine any country has strict laws concerning non-declaration of commercial goods at the border. If you are the importer of the record, this could fall on you.
What was your supplier’s explanation? Under DDU terms the buyer (you) is technically responsible for arranging import clearance and formalities, but it also depends on the contractual agreements for delivery laid out between you and your supplier. For best results, I suggest you contact a trade attorney.
You said you have bought product from this supplier for many years. If you have a good relationship with them, perhaps you can secure some kind of compensation from them. Alternatively, I would suggest you change the buying terms from DDU to EXW or FCA where you control the freight and logistics coming from Turkey to Sweden.
Question: Our customer requests to do biz at DDU or DES term. The payment term is 60 days after the date of invoice. In such case, when can we bill the customer? On the date that the material is delivered at the destination, or the date that the cargo is on the vessel? If we can not bill the customer until the material is delivered at the destination, then the customs at destination country should be able to accept an e-copy invoice, correct?
There is lot of confusion in DDU terms … who will responsible for warehousing charges …
Warehousing charges comes under DUTIES ??
Only responsbility of seller is to provide the goods at destination place with all expances.
for import clearence & trasportation till werehouse buyer is responsible but who will suffer this expances.
Hi. We have received in Poland the shipment (DDU terms)coming from Amsterdam shiped by supplier registered in Germany, the delivery document was german invoice. After that we were informed the shipment was originally done from Japan then we also received T1 document not being cleared. My question is which side is responsible to do the import customs?
Re: Jacek on Thu, 4th Feb 2010 9:40 am
Wow Jacek, what a complicated shipment. In answer to your question, technically speaking under DDU terms the buyer (you) is ultimately responsible for import customs entry. Check the terms and conditions of your order with your seller to clarify.
Despite all questions answered, it´s not clear to me yet:
On a importation case under DDU rules in Brasil the harbour warehouse expenses increases significantily due the delays related to the import process. These delays were not caused by the buyer or seller, but related to terms that the tax brazilian department has to do some tasks.
Who shall pay these warehouse expenses? The buyer or the seller?
I need some help with the Seller’s risk under DDU term.
What if the buyer has sign the delivery note (DN) knowing that the goods receive are under damage condition, and the reason for accepting the goods is because the buyer need the goods urgently and cannot afford to wait for damages to be audit.
I believe when the DN is signed, the buyer should bear the risk. Besides, does the buyer has the obligations to inform the seller of the damange cargo before signing the DN (no matter how urgent the shipment is).
Hi If the delivery terms are DDP POrt of unloading, then are the DDU charges payable? and if yes , Is customs duty and DDP charges same?
Can a freight forwarder claim both Customs duty as well as DDU charges in his invoice?
i will issue order of supplying material from local market within the country (no custom clearance or duty)
what is the Proper incoterm? what is the Proper incoterm? we are using SAP system and I should select one of the 13 Incoterms.
please help
best reg
Hi, please if someone could help me with a doubt regarding if DDU Incoterm includes insurance or not, doing some research the info I found is contradictory.
My client request this be stated on shipping invoice when DDU or CIP is use, and so we have done it for several years.
Today when preparing a shipment, a new colleague at origing is claiming this is incorrect.
Thanks in advance for any help
I would like to know something more about new INCOTERMS DAP and DATThank you
We have arranged shipment to HK (DDU HK) but buyer insisted that the unloading charges at the destination should be absorb by the supplier.
Pleae advise it is right?
i have a situation whereby shpr request to place bkg to port (A) n later when vsl sailed only shipper informed they overlook in the documents as this shpmt is under DDU terms to inland destination (B). How can this matter be resolved? How can the shpg line assist w/rgds this current situation?? We have current managed to source a local agent/fwdg arm to do the delivery. Hence what would be the steps & process involved to solve this issue. Can anybody assist????
who pays the Custom Duty in the case of DDU shipment?
Seller or Buyer
Dear Sir,
I have sold the goods as per DDU Terms hence you are requested to plz advise me as early as possible who will pay the custom duty on destination.
DDP Terms – Does this include payment of freight by the supplier?
Pl clarify on priority.
If we use Port Name along with DDU (viz., DDU Jebel Ali Port). Is it mean CFR or DDU Buyer’s site ?
Please clarify on proirity basis
wht is DDU in case of agent nominated business??? who will be resposible to payment for domestic charges??? shipper or buyer???pls advise thanks…
Bottom line..as seller, can I invoice transportation cost to buyer under DDU?
Does seller invoice buyer for transportation costs under DDU?
Dear Sirs,
Can I assume meaning of the trade term “DDU” has been covered as cost + Freight + Insurance including the commodity is delivered at the buyers destination (exclulding the charges and responsibility of customs clearance in the country of the final destination).
Please reply to this enquiry
Ramakrishnan.
What is DO charges.
DO – Delivery Order being customs release of named cargo.
DDU – seller assumes all cost upto named point – say Auckland.Seller is not responsible for insurance on the shipment – consignee should arrange insurance cover or have an open marine policy that covers all shipments.
DO Charges means Delivery Order Fee or Document Charges.
could you plz. tell me what is the difference between cip & ddu
which will be more advantage for the the beyer….
It really depends on what you consider an advantage to the buyer. Honestly, both incoterms are quite similar, but most often when companies are selling under DDU terms they are usually including a destination delivery cost into the DDU price. While that is a common misconception with DDU terms, many companies price it this way.
What the buyer needs to do is clarify with the seller the exact delivery point in the named incoterm and also whether the seller is including insurance coverage up to that named point.
In both cases the buyer is responsible for all import customs formalities and payment of customs duties. However, the main differences between the two incoterms:
CIP – normally up to destination port only and seller is technically obligated to include insurance
DDU – seller often includes destination delivery to buyer’s designated delivery address, but not always. Seller is not obligated to include insurance.
Hope this helps. This is an interpretation based on the limited information given and should be considered a guide only. A professional trade attorney would be best suited to legally answer your question.
Hi everybody,
I urgently need help.
We have delivered some goods under DDU term. We did not provide insurance on the goods, but we requested the buyer to provide it, although buyer did not.
The goods has been damaged during the transport.
The liability of the seller in this case is limited to transport rules of reimbursement (few € / kg) or total?
Transport companies tell me the first, while customer claims a total reimbursement of the damage.
Some one can help me.
You can also write at amato@thermocold.it
Francesco – when in doubt, consult your insurance carrier or risk management company. A trade attorney can also help.
Without knowing the specifics of the deal, technically speaking risk and responsibility of the goods rests with the seller (you) up to the named place of destination in the DDU terms. That being said, the seller is technically not required to purchase insurance but it would be wise to do so: for the exact situation that occurred with your shipment to the buyer. If it was me I would not rely on your transportation company’s perspective – they are giving you advice from a transport company perspective only, they are not the experts when it comes to the relationship with your buyer.
All that being said, it can be argued exactly how much cargo damage you (the seller) should pay depending on what you and your buyer both agreed upon when negotiating the sale. As I have no idea what you negotiated I can not say. But ultimately what it boils down to is: how much do you value your customer? Was this a one time buy from a new / dubious buyer? Or is it a regular customer who frequently purchases from you? If it is a valuable customer you should probably consider covering the total cost of the cargo claim to keep them happy. If it is a large amount and you don’t want to set a precedent for future mishaps, make sure your customer knows that you are doing this as a professional courtesy and to keep their good business but that you will not cover such losses in the future; remind them that you advised them to purchase their own cargo insurance and should they decline to purchase their own insurance in the future you will not cover any losses.
No matter what you should go after the transport company for losses but they are correct that they will only cover losses up to the limits in the transport rules of reimbursement. Unless you purchased additional cargo insurance at a premium from them, they will not cover a penny more.
Whenever I deal with clients who sell goods on a DDU basis I always strongly suggest that they have cargo insurance coverage for their shipments all the way up to the named destination in the DDU sale. Because if there is a problem the buyer is always going to come to you, the seller, and under DDU terms expect the seller to cover the full costs of any damages. If you are a large enough company with multiple shipping transactions you can probably get a blanket cargo insurance umbrella from your existing insurance carrier. Be sure that you are comfortable with any deductibles you agree to.
All the above is a general guide only based on the very limited info provided. For true, expert advice you should consult your trade attorney or insurance broker.
Hi!!!
Does DDU inclusive of unstuffing at the destination from the Shipper point of view?
Generally speaking, no. Under DDU the seller is only obligated to arrange delivery to the named place of destination. The seller is not responsible for import customs clearance and typically would not be responsible for unloading the container at destination either. But this is a general answer based on a very general question. Be upfront and clear with your buyer on what you both agree upon in regards to your sale.
Dear author
The explanations are very clear .fo understanding. It hastened me to understand the term more clear to explain to other staff.
Best regards
Huawei Technologies Azerbaijan LLCC
I am little bit confuse about DAP terms. if Shipping terms is DAP. then who will pay import customs clearance charges. as i have seen in incoterms some where mentioned i t has to pay by buyer and some where mention it has to pay by seller.
We have DDU terms for delivery to our customer’s site. Does ownership pass on to the customer as soon as goods reach the site? Or do they have to be off-loaded from the trailer for ownership to pass on to them? Thanks
Rajesh
Terms DAT the buyer must pay the import clearance, in fact everything from arrival destination terminal or cfs
Francesco
The term DDU has not existed in incoterms did not exist when you made the shipment
Salim
DDU no longer exist so I cannot tell you the difference between that and CIP
Luna and Suneet To repeat DDU no longer exist ,but whenj it was a valid incoterm the unloading cost
at the buyers warehouse was for his account ,in Hong