Incoterms guide explains DDP and DAP shipping responsibilities

International shipping terms, known as Incoterms, dictate the division of responsibility between sellers and buyers regarding transport, risk, and customs formalities. Two primary methods are Delivered Duty Paid (DDP) and Delivered Duty Unpaid (DAP/DDU).

Under DDP, the seller assumes responsibility for all costs, including import duties, taxes, and clearance charges, often collecting these at the point of checkout. This method is noted for reducing delivery refusals and cart abandonment. Conversely, under DAP or DDU, the buyer is responsible for paying duties, taxes, and brokerage fees upon the parcel's arrival in the destination country.

Regulatory changes are impacting these processes. In the European Union, the removal of customs duty exemptions on low-value parcels has increased the complexity for sellers. Similarly, in the United States, the suspension of the de minimis exemption means all incoming parcels are now subject to duties, regardless of their value.