The e-commerce business has seen a sharp increase in business growth especially during the pandemic covid- 19. As people want to remain at home and stay safe. The ease of booking orders online and having products delivered at doorstep is being the basis of increase in e-commerce business. Incoterm 2020 provides multiple options of doing business with set rule of responsibility and risk, without any confusion & misunderstanding between the buyers and sellers.
There are 2 most popular incoterms on the e-commerce online platform. These two rules are DDP (Delivered duty paid) and DDU (Delivered Duty Unpaid). By using these two terms the buyer can get the product delivered to a destination.
In order to understand these both term, let us have a comparison of ddp vs ddu. DDP delivery services are most widely terms, as compared to the ddu delivered duty unpaid shipping. The reason of more usage of the term DDP shipping is the basic fact that the buyer. Gets the delivery of product at its doorstep, without any hassle. And all the responsibility and risk in ddp shipping for the product till the delivery of product to the buyers lie on the seller. Once the product is delivered under ddp shipping the risk transfers to the buyer.
Most of the buyer when given option of ddp vs ddu shipping prefers ddp shipping. More e-commerce businesses are now working on the term of ddp delivered duty paid shipping. In order to increase their sales volume.
Incoterm difference ddp vs ddu
Ddp meaning in shipping is that its set all the risk, responsibility and cost to be borne by the seller. Till the product is delivered to the buyer’s doorstep. Under ddp delivery services the seller will arrange the logistics, custom. Shipping and even will have to pay for the duties on the product in the buyer’s countries. The seller after clearing the good will arrange for the delivery of goods to the buyer’s destination.
Under ddp shipping the buyers is at its ease that he will not be bothered by any cost or risk. Till the product is delivered to its place. Under ddp delivery services the buyer can safe himself form any scam or fraud that are being usually committed in online businesses. As the buyer will get the delivery of the product he is in better position to manage his prime work without any distraction.
On the contrast to the ddp delivery services the ddu delivered duty unpaid shipping the seller is only responsible for the product till the product reaches the buyers destination country. Once the package has arrived at the country of destination all the responsibility and risk transferred to the buyers. In ddu shipping the seller will only arrange for the logistic and custom in his own country. Will cargo under ddu freight the product to the buyer country. Once the product is received at the buyer’s country, the further risk, cost and responsibility transfers to the buyer. Under ddu shipping once the product is received in the buyer’s country, he will arrange for any further logistics, and will have to bear the cost of duties and fees at his country port. Any demurrages or storage at the buyer’s country port will be the responsibility of the buyer.
When we compare ddp vs ddu the seller is more convenient in working under the ddu shipping terms. Under ddp shipping is bit tricky to handle for the seller, and he might need the services of a shipping agent at the destination port. AS different countries have different set of rules and duties for each product coming from different countries. Under ddp shipping the seller need to calculate all the cost before offering the product to the seller in order save himself from any loss or unseen cost.
On the other hand of ddp vs ddu, the buyer is more convenient in buying the product online on ddu shipping term. As he does not need to bother for the duties and risk, till the product is delivered to him.
It is true that the ddp delivery services has more risk and responsibility on the seller. But still the ddp delivery services is better for the seller, as it will help him in increased sales. As most of the buyers will prefer ddp delivery services. In order to avoid the loss in ddp shipping, the seller can engage their services of competent sipping agent who can handle work on his behalf and the destination country.