What is DDP in Incoterms 2020

What is EORI number and when Amazon sellers need one?
February 27, 2020
Incoterms 2020
February 27, 2020

What is DDP in Incoterms 2020

DDP (named place of destination) is an internationally used term of trade that is generally used to signify a trade deal where the seller has agreed to pay all the costs including transportation, import VAT and duties and also suffer any losses that may potentially arrive out of moving the goods sold to a specific pre-decided location.

The term should be widely known by Amazon sellers as all deliveries to Fulfillment Centers in the European Union are accepted by Amazon on DDP terms only.

DDP is a well recognized logistics term and a part of the glossary of Incoterms 2010, a series of terms which are used and accepted globally in international trade, and are published through the ICC. The agreement of DDP is generally applicable on any means, or a combination of means of transport and ideally would list out and pinpoint the exact point in which the buyer assumes all the financial responsibilities e.g. DDP Warsaw.

In the agreements of DDP, it is the seller who assumes responsibility for payment of the import duties and all the taxes that are applicable, that include clearing of cargo or any form of local taxation, from the time the cargo arrives at the destination that has been specified.

DDP would simply mean that all the risk and total costs for delivering cargo to a pre-decided location is taken on by the seller. Ideally this would mean that the seller is completely responsible for packaging of goods, approval for export, preparation of documents, charges for loading and final delivery, unloading of the cargo and having the cargo cleared for import (import VAT and duty).

While we always have clear guidelines about the Delivered Duty Paid arrangements and contracts, there will still always be situations that may end up resulting in disputes. One such situation may arise when the individual/established who has been appointed as the carrier for the cargo fails to unload the cargo in due time, which arises out of a result of non-receipt of timely clearance from any of the parties who are involved in the trade.

In such a scenario, the fault would generally arise from the concerned party who had failed in providing timely and correct documents required for the clearances. However, pinning down the responsibility of such an error can always be more difficult than it is presumed to be, as requirements for documentation are usually determined and defined by the local and the national authorities who control the Ports. This may change or vary from one country to another and can be used as alibi by either party to evade responsibility of the delay arising out of incomplete paperwork.

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