Incoterms: DDU – Delivery Duty Unpaid
September 30, 2006 by SwizStick
Filed under Education, Incoterms 2000
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 responsiblity 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.
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Steve on Wed, 10th Oct 2007 7:48 pm
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?
Naseer on Fri, 16th Jan 2009 12:17 am
who pays the Custom Duty in the case of DDU shipment?
maikel on Mon, 9th Feb 2009 8:33 am
to: NASEER:
“The buyer assumes all risk and responsibility for the import clearance, duties, and delivery to final destination”
Shah Alom on Fri, 3rd Apr 2009 9:42 pm
Who pays destination port charges & carrying cost from destination port to buyers warehouse under DDU terms ?
Manglani on Sun, 5th Apr 2009 7:33 pm
If DDU term calls for delivery to project site, then isn’t seller responsible for local transportation from custom-clearance point to project site?
Velu on Sat, 18th Apr 2009 1:21 am
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
Leena Wanganoo on Thu, 23rd Apr 2009 1:15 am
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 .
henry lim on Thu, 21st May 2009 4:31 am
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
3plwire on Thu, 28th May 2009 9:44 am
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.
3plwire on Thu, 28th May 2009 9:48 am
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.
3plwire on Thu, 28th May 2009 9:50 am
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.
Peter on Tue, 23rd Jun 2009 1:29 pm
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?
SwizStick on Tue, 7th Jul 2009 4:11 pm
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.
Angela on Mon, 13th Jul 2009 8:05 pm
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?
DATTARAJ on Tue, 4th Aug 2009 11:53 pm
There is lot of confusion in DDU terms … who will responsible for warehousing charges …
Warehousing charges comes under DUTIES ??
SHARAR on Wed, 6th Jan 2010 2:35 am
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.
Jacek on Thu, 4th Feb 2010 9:40 am
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?
SwizStick on Mon, 8th Feb 2010 11:08 pm
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.