Useful Information - Incoterms

Incoterms - DDU

DDU (Delivered Duty Unpaid) is a Multimodal term that must be further qualified by naming the place up to which the seller is prepared to take responsibility for transport costs (and the corresponding risks of transit). This is excluding the payment of domestic duties and the ancillary clearance charges associated with the import process at destination.

DDU will often financially correlate to CPT. But, for the buyer DDU represents CPT without the disadvantages of placing risks on the buyer, over which they have no control. (See CPT)

From the seller's perspective, DDU reverses the risk advantages of CPT, placing all risks with the seller until the cargo arrives at the named port.

As with all of the D prefixed terms, this term is not easy to use in conjunction with a Documentary Credit and as a multimodal term, would require the use of Multimodal transport documents over any traditional monomodal documents such as Bills of Lading or Airwaybills.

Sellers are further cautioned that, if the intended transit is beyond the point of entry in the country of destination, then their ability to move the goods to the final destination may be dependent on the buyer's ability to first clear the goods through the customs authority. The possibility of delays in transit and any resultant storage charges (should the buyer fail to conduct clearance in good time), should be noted.

Seller's should be equally aware of additional charges which may be due for payment resultant from local taxes which do not fall into the category of 'duty', but are nevertheless payable prior to release.

DDU (and DDP) correlates closely to the generic expressions of 'free domicile' and 'free house', which are frequently used in the transport industry. Each should be avoided due to their ambiguous nature.


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