DPU vs DDP : What’s the Difference? | Importer’s Guide
You can see various terminologies when importing from China anywhere in the world. Sometimes these intercoms are common or easy to presume, but others are more complex. When choosing your method of shipping from China, you’ll see words like DPU or DDP. What are those words and how are they different from each other? We will address DPU vs DDP in this article by ddpch.
What Is Delivered Duty Paid (DDP)?
Before reading about DPU vs DDP, we must first read about DDP.
Delivered Duty Paid (DDP) is a distribution agreement whereby the retailer assumes all liabilities, responsibilities, and expenses associated with the goods being transported. This all happens before the buyer gathers them or moves them to the destination port. This agreement includes payment of shipping costs, taxes on exports and imports, insurance, and all other costs incurred during shipment to a location in the destination country.
Further Reading: EXW vs DDP : What is the Difference? | Full Guide Version 2020
DDP positions the seller sole responsibility for the delivery of the goods. The seller shall arrange all transportation and associated costs. These include export clearance and customs paperwork required to reach the destination port. The vendor’s risks are high and include VAT fees, bribes, and storage costs in the event of any unexpected delays.
What is Delivered at Place Unloaded (DPU)?
Now that we read about Delivered Duty Paid (DDP), before moving on to DPU vs DDP, it is necessary to read about DPU.
Delivered at Place Unloaded (DPU) (formerly known as DAT for “Delivered at Terminal”) allows the seller to deliver the goods at the purchaser’s disposal after they have been unloaded from the arriving mode of transportation.
DPU is the only Incoterms law requiring the vendor to unload products at the destination location.
DPU can apply to any mode of transportation, and more than one. The buyer and the seller will identify a designated destination location and consent.
DPU allows the seller to clear products for export, without any requirement to clear the products for import, pay import duty, or conduct customs import formalities where appropriate.
DPU vs DDP: The Difference
Now that we have read about both h DPU and DDP, we can talk about how these are different.
As you might have guessed, in a DDP agreement, the seller is responsible for paying all the payments of the import process. whereas, in DPU, the seller is only responsible for preparing the goods for clearance and is not responsible for paying any of the fees.
Moreover, as mentioned above, DPU is the only Incoterms law that requires the seller to unload products at the destination location. But in DDP, the seller is not accountable for such an issue.