DDP delivery with import duties paid by the seller

Definition

DDP (Delivered Duty Paid) is the any-mode Incoterms® 2020 rule with the seller’s maximum obligation: deliver at the named place of destination, clear import, and pay import duties and taxes, making goods available ready for unloading.

DDP “all-in” sells well commercially; in ops it breaks if nobody can pay VAT or sign the entry.

What DDP is

It covers carriage to destination + import formalities + duties/taxes.

If the seller cannot obtain licenses or pay taxes in the buyer’s country, do not use DDP — use DAP.

Why it matters (shipper / 3PL / carrier)

1.Shipper

As seller, you take IOR, duties, and import VAT — commercial margin must fund tax cash; as buyer, you get “landed” but lose control of the entry.

2.3PL / broker

Only run DDP if a viable IOR entity and duty funding exist; otherwise propose DAP with the buyer’s broker.

3.Carrier

Crossing and destination appointment still need correct docs; the Incoterm does not replace the entry or border transfer.

Common Mexico–US mistakes

1.Impossible IOR

Seller with no entity/registration to import into the US or Mexico — DDP becomes a broken promise.

2.Duties with no budget

VAT/duties eat margin if they were not modeled in the quote.

3.DDP on the PO, DAP in ops

Sales vs operations misaligned; the buyer’s broker cannot invent the seller’s IOR.

4.Ignoring transfer / through-trailer

MX–US crossing needs entry alignment with the real unit mode.

Checklist

  1. IOR

    Can seller do it?

  2. Duties

    Clear budget.

  3. Place

    Exact destination.

  4. Alt.

    Better as DAP?

OCL and the file

OCL is not a customs broker or tax opinion. It helps separate the commercial DDP promise from trip evidence (POD, charges, IDs) before freight pay.

Sources and further reading

  1. Pillar: Incoterms® 2020.
  2. Siblings: DAP · EXW · customs clearance.
  3. ICC — Incoterms® 2020 (official publication; registered trademark). OCL educational paraphrase.
Key takeaways5 points
  1. DDP = seller’s maximum duty: delivery at destination with import clearance and duties paid.
  2. Buyer usually only unloads (unless otherwise agreed).
  3. Dangerous if the seller cannot be importer of record in the US or Mexico.
  4. Common alternative: DAP + buyer’s broker.
  5. ICC trademark — educational paraphrase.

Is DDP blowing your margin on duties?

Let’s separate logistics service from import tax obligation — not a customs ruling.
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