HomeDDP vs DDU vs DAP
Incoterms · Duty and liability
DDP pays the duty. DAP hands you the bill.
Three terms that describe the same truck, the same container and the same flight. The only thing they change is who stands in front of U.S. Customs — and who is still standing there when a classification gets questioned.
Three terms. One line of difference.
Freight, packaging and transit are identical under all three. What changes is who clears the goods into the United States and who pays the duty — everything else is detail.
Under DDP the seller clears the goods into the U.S. and pays duty. Under DAP the seller delivers to the named place but the buyer clears and pays. DDU was the old name for DAP and has not been an official term since 2010.
That is the whole structural difference. It is worth saying plainly because the three labels are often used as if they described levels of service — cheap, standard, premium — when they describe a single handover point: the customs entry.
DDP — Delivered Duty Paid. The seller carries export clearance, freight, U.S. import clearance, duty and import taxes, and delivery to the named place. The buyer receives goods and a paper trail. What the price includes beyond that is a matter for the quotation, not for the three letters.
DAP — Delivered at Place. The seller carries everything up to the named destination, ready for unloading. The buyer handles import clearance and pays duty, taxes and any destination charges not named in the price.
DDU — Delivered Duty Unpaid. A retired label. It described exactly what DAP describes now, and was removed when Incoterms 2010 took effect.
| Obligation | DDP | DAP | DDU |
|---|---|---|---|
| Export clearance | Seller | Seller | Seller |
| International freight | Seller | Seller | Seller |
| U.S. import clearance | Seller | Buyer | Buyer |
| Duty and import tax | Seller | Buyer | Buyer |
| Importer of record | Seller or its agent | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer | Buyer |
| Official term today | Yes | Yes | No — retired |
None of the three terms say how the goods travel. Air and sea are priced, booked and screened separately, and both can be quoted under any of these labels. The DDP guide covers what an all-in price usually contains once a mode is chosen.
Risk passes in the same place. The wallet doesn’t.
Both terms hand over at the named destination with the goods ready for unloading. The difference is not when risk moves — it is who has to solve a customs problem at 4pm on a Friday.
This surprises people who assume DDP is the "safer" option. On risk, DDP and DAP are twins: the seller bears loss and damage until the goods are placed at the buyer’s disposal at the named place, ready for unloading. If the container is damaged in transit, the seller’s insurance and the seller’s problem are the same under either term.
Where they part is liability for the entry. Under DAP, a customs question lands on the buyer’s broker and the buyer’s bond. Under DDP, it lands on whoever the seller appointed — and the seller has already promised a delivered, duty-paid outcome, so the cost of resolving it sits with them.
That promise has a price. A DDP rate carries an implicit premium for customs capability: knowing the classifications, holding or arranging a bond, absorbing the occasional exam, and being able to answer CBP within the response window. A DAP rate does not carry that premium, because it does not carry the obligation.
Incoterms 2020 states the boundary from the other direction: a seller who cannot complete import clearance should not use DDP, and should use DAP instead. This is the provision most often ignored in practice, usually by sellers who quote DDP and then discover at the port that they have no way to be the importer.
The practical test is not which term sounds more complete. It is whether the party accepting the entry obligation can actually perform it — a bond, a broker relationship, a filing history and someone awake when the entry is rejected. Where that capability is missing, DDP is a promise the paperwork cannot keep. Where it exists, the handoff sequence looks the same as any other shipment until the entry is filed.
DDU is not a term anymore. It is a habit.
Removed in Incoterms 2010, not restored in 2020. Every quote labelled DDU today means DAP — and should be checked for the two DAP boundaries that habit tends to skip.
DDU survived because it is more descriptive than its replacement. "Delivered duty unpaid" tells a buyer exactly what is missing. "Delivered at place" says nothing about duty at all, so people keep reaching for the older, clearer words.
The label itself is not the problem. The problem is what a DDU quote tends to leave unsaid, because the template it came from predates the current rules:
- Who unloads. Under DAP and DDP alike, the buyer unloads. A quote that silently includes unloading is quoting a service the term does not require — fine, but it should be a line, not an assumption.
- Which destination charges are inside. Terminal handling, chassis, drayage, appointment fees and storage are named or excluded. "DDU to your door" is not a scope.
If a supplier sends you a DDU quote, the useful reply is not a correction. It is a question: does this include unloading, and which destination charges are outside it? The answer tells you whether you are looking at a DAP quote or a template.
One more thing worth separating: the term does not choose the aircraft or the vessel. A DDU quote by air and a DDU quote by sea differ in cost by an order of magnitude and in risk by more, and neither difference comes from the three letters. Compare modes on their own terms — air prices on chargeable kilos, sea on cubic metres.
Both terms hide cost. Not the same ones.
A DDP number looks finished. A DAP number looks cheap. Neither is complete until the exclusions are named, and the two lists are not the same length.
Bond
Duty paid and bond arranged are different sentences. A single-entry bond is bought per shipment; a continuous bond is held annually. If a DDP quote does not say whose bond is used, the cost is either absorbed quietly or missing.
Chassis and drayage
The leg from the terminal to your door. Frequently described as included and frequently repriced when the port is congested. On DAP it is usually the buyer’s line; on DDP it should be printed, not implied.
Exam holds
A CBP examination is a legal process, not a service. Fees, storage and the delay are outside both terms, and outside anyone’s ability to waive. No honest quote absorbs an unknown number of exams.
Free time
Terminals give a window before storage starts. On DAP the clock is the buyer’s, because the buyer controls the broker and the pickup. On DDP it is the seller’s problem until delivery — which is one reason DDP costs more.
There is a second asymmetry that rarely appears in comparison tables. Under DAP, the buyer pays customs fees at retail: a broker’s per-entry charge, a bond premium, terminal fees billed individually. Under DDP, those same items sit inside a forwarder’s contract rates, which are lower per unit but invisible. The cheaper-looking term is not always the cheaper shipment, and the difference usually shows up on the third or fourth arrival, not the first.
Choose by who can legally be the importer.
This is a qualification question before it is a price question. The answer is usually obvious once you know whether your company can appear on the entry.
- You have a U.S. entity, an EIN, a continuous bond and a broker you use. DAP is usually the lower total cost, because you pay duty directly and your broker’s fees are already sunk. You also keep the entry record, which matters if you ever need to prove origin or respond to a CBP inquiry.
- You have none of those, or ship a handful of times a year. DDP is the practical choice. The premium buys the customs capability you are not maintaining yourself.
- You sell on Amazon FBA. Amazon does not act as importer of record for your shipments. Whatever term you buy, confirm that the name on the entry is the one your account expects — this is the single question most worth asking before a first FBA delivery.
- Your product sits in a high-duty category. Under DDP the duty figure is an estimate tied to a named HS code, and a reclassification is a real cost. Read the DDP quote as an estimate that the seller has agreed to stand behind within a stated basis, not as a fixed tax.
- You need a number that does not move. DDP gives you budget certainty and charges for it. That is a legitimate reason to choose it — just do not confuse certainty of the invoice with certainty of the classification.
Duty is an estimate computed from the HS code you supply, never a guarantee. The importer of record is normally you, with a bond arranged for the shipment where needed and disclosed as a line. Chassis and drayage appear as named charges when the lane requires them, and free time with the daily rate after it is printed rather than assumed.
Whichever term you choose, the quotation should name the product, quantity basis, origin, destination, mode, included handling and known exclusions. Send the cargo details and the reply will state which of these it can confirm and which it cannot.
Four questions that decide it. Ask them early.
These come up in almost every first conversation about DDP versus DAP. The answers below are short on purpose.
01Cost and capability
Is DDP or DAP cheaper?
DAP usually shows the lower number, because duty is not in it. It is not always the lower cost. On DAP the buyer pays a broker, often a single-entry bond, terminal charges and any storage, and those items are priced at retail rather than inside a forwarder’s contract rate.
For a buyer with a U.S. entity, a continuous bond and regular volume, DAP is often cheaper in total. For a buyer shipping twice a year, DDP usually wins once those fees are added up.
Can I buy DDP if I don’t have a U.S. company?
Yes, and that is the main reason buyers ask for it. But the importer of record has to be someone, and that someone needs an EIN or SSN and a bond. Ask which name goes on the entry before you accept the price.
If the answer is the forwarder’s, understand what that means for your records, your sales tax position and any platform requirements you operate under.
02Terms and liability
Is DDU still a valid Incoterm?
No. DDU was removed in Incoterms 2010 and replaced by DAP; Incoterms 2020 did not bring it back. A quote that says DDU is using a retired label for DAP.
The label is harmless on its own. What matters is whether the quote states DAP’s two boundaries: who unloads at destination, and which destination charges are inside the price.
Who pays if customs reclassifies my product?
The importer of record. Under DDP that is the seller or its agent, and a well-written quote will say the duty figure is an estimate based on a named HS code. Under DAP it is the buyer, directly.
Either way, classification is a legal determination made at entry, not a commercial one, so no quote can promise it away.
Tell us the cargo. We will tell you which term fits.
Product, origin, destination and timing are enough to start. If DAP is the better answer for you, the reply will say so.