DDP vs DAP:
What's the Difference and Who Pays Duties?
Effective Date: January 2026
Choosing between DDP and DAP is not just paperwork. It decides who owns the import process, who pays duties and taxes, and how predictable the final landed cost is.
This guide explains the difference in plain operational terms, highlights risks SMB shippers often miss, and provides a practical framework for comparing quotes fairly.
Quick Answer:
- DDP (Delivered Duty Paid): The shipment is delivered to the destination with import clearance and duties and taxes handled in the all-in scope.
- DAP (Delivered At Place): The shipment is delivered to the destination, but import clearance and duties and taxes are paid by the buyer or importer.
- Main difference: DDP prioritizes landed cost predictability; DAP prioritizes importer control and flexibility.
- Most common SMB issue under DAP: duties, taxes, and clearance responsibilities are underestimated, leading to delays and unexpected costs.
- For Amazon FBA: DDP can be simpler when the seller does not want to operate the import process. DAP can work when the importer has a clean IOR and broker setup.
- DDU note: "DDU" is a legacy market term people still use to mean "duties unpaid." It is not an Incoterms 2020 term, but it remains common in industry conversations.
What is DDP Shipping?
DDP (Delivered Duty Paid) is an Incoterm where the seller or service provider is responsible for delivery to the named destination, including import clearance and duties and taxes as part of the delivery scope.
In operational terms, DDP aims to produce a single, all-in landed cost. This number is only meaningful when the quote scope is explicit and comparable across providers.
DDP typically includes:
- Leading freight (air or ocean)
- Import clearance coordination
- Duties and taxes handling within the agreed scope
- Final delivery to the named destination
DDP does not remove the need for accurate shipment data. Incorrect cargo details or documentation still cause exceptions.
What is DAP Shipping?
DAP (Delivered At Place) is an Incoterm where the seller or service provider delivers the shipment to the named destination, but the buyer is responsible for import clearance and payment of duties and taxes.
DAP can be efficient for companies with an established import operation. It gives control over broker selection, duty management, and compliance decisions.
DAP typically includes:
- Leading freight (air or ocean)
- Destination delivery coordination
- Excludes import duties and taxes (paid by buyer)
- Excludes buyer-side customs clearance payments and importer responsibilities
Under DAP, "delivered" does not mean "import complete." The last operational mile is often "customs complete," and that step is the importer's responsibility.
DDP vs DAP Comparison Table
| Topic | DDP | DAP |
|---|---|---|
| Duties and taxes | Included in the agreed all-in scope | Paid by buyer or importer |
| Importer of Record (IOR) | Provided through the executing carrier's approved IOR structure (by arrangement) | Buyer or buyer-appointed entity is typically IOR |
| Customs clearance | Managed within the DDP delivery scope | Buyer manages clearance via broker, pays charges |
| Landed cost predictability | Higher, if scope is standardized | Lower, unless buyer models duties and fees precisely |
| Control of import process | Lower, importer control delegated | Higher, importer controls broker and clearance strategy |
| Delay risk at import | Lower when documentation is correct, higher when scope assumptions are wrong | Higher for new importers, depends on buyer readiness |
| Best fit | SMB imports, eCommerce sellers, teams without customs function | Importers with brokers, compliance staff, established routines |
| Common failure mode | Scope mismatch (what is included is unclear) | Underestimated duties, missing docs, delayed clearance payments |
Who Pays Duties Under DDP vs DAP?
Under DDP, duties and taxes are included in the all-in delivery price. The executing carrier provides import capability through its approved IOR structure as part of the DDP service.
Under DAP, the buyer is responsible for paying duties and taxes and completing import clearance. The importer must be ready to manage broker communication, provide documents, and pay charges on time.
If the quote does not specify who pays what, treat the term as a marketing label rather than an operational commitment.
The Risks SMB Sellers Miss Most Often
The difference between DDP and DAP becomes costly when responsibilities are assumed instead of stated. The most common SMB issues are predictable.
1) Duties and taxes are treated as an afterthought
Duties depend on HS code, origin, product category, and trade policy. Under DAP, a low freight number can seem attractive until the importer receives a duty bill and a clearance delay.
2) The Importer of Record is not clearly defined
Many disputes come down to one question: Who is IOR? If IOR is undefined, accountability collapses and the shipment can sit.
3) Documentation gaps delay clearance
Commercial invoice errors, missing product descriptions, unclear valuation, or incomplete shipper data can trigger holds. Under DAP, the buyer must resolve these fast.
4) Scope mismatch between providers
Two offers can look comparable while including different elements. Some quotes hide brokerage, handling, or last-mile fees until execution.
5) Customs holds and exams are probabilistic
Inspections happen. The risk is not just the exam itself but also response speed and document readiness. Under DAP, the importer must coordinate. Under DDP, the executing carrier manages the workflow, but the shipper still must provide accurate data.
6) Destination constraints, especially Amazon
Amazon inbound requires labels, carton and pallet compliance, program rules, and appointments. If the shipment arrives "delivered" but not compliant, it is incomplete.
DDU Explained (and Why People Still Use It)
"DDU" (Delivered Duty Unpaid) is a legacy industry term that many people still use to describe delivery where the seller does not pay duties and taxes.
In Incoterms 2020, DDU is not used. In practice, many teams use "DDU" as shorthand for a DAP- like outcome: freight delivered, duties unpaid, clearance and payment handled by the buyer.
When a provider says "DDU," the practical question is the same as under DAP:
- Who is IOR?
- Who pays duties and taxes?
- Who manages clearance?
- What is included in the quoted price?
Treat "DDU" as a conversation starter, not a contract answer.
When DDP Is Usually the Better Choice
DDP fits best when the priority is predictable landed cost and reduced operational burden.
DDP is often appropriate when:
- The shipper does not have a dedicated customs operation.
- The business is scaling and needs a repeatable all-in pricing model.
- Duties and taxes volatility is a material risk to the margin.
- The shipment must land quickly, and delays cost more than minor price differences.
- The destination is an operational system like Amazon, where timing and compliance drive outcomes.
DDP works best when the quote scope is standardized and the input data is accurate.
When DAP Can Be the Better Choice
DAP can be the better choice for importers who want control and already have compliance capacity.
DAP is often appropriate when:
- The buyer has an established broker relationship and internal compliance checks in place.
- The buyer wants control over the clearance strategy and duty management.
- The shipment involves complex classifications that require importer-specific handling.
- The buyer prefers to handle duties and taxes directly for accounting or cash-flow reasons.
DAP is not inherently "cheaper." It is more variable, and that must be managed.
Practical Cost Framework
A clean decision starts with a shared cost model. The simplest way to compare DDP and DAP is to map every component that affects landed cost.
Landed cost:
| Cost Component | Cost Details |
|---|---|
| Freight | Main transportation cost (air/ocean) |
| Brokerage/Clearance | Customs clearance and broker fees |
| Duties | Import duties based on HS code and origin |
| Taxes | Import taxes and VAT (if applicable) |
| Last-mile | Final delivery to destination |
| Accessorials | Additional services (if any) |
How the same formula shows up under each term:
- DDP: most components are bundled into one all-in scope, including duties and taxes, subject to stated inclusions and correct shipment data.
- DAP: freight and delivery may be quoted, but duties, taxes, and many clearance payments remain on the buyer's side.
FAQ
Is DDP always more expensive than DAP?
Not necessarily. DDP can be higher on paper when compared only on freight, but it often becomes competitive when comparing actual landed cost with duties, taxes, clearance payments, and delays included.
Who is the Importer of Record under DDP?
Under DDP shipments through AiDeliv, the carrier provides import capability through its approved IOR structure as part of the DDP service.
Can an Amazon seller ship under DAP to FBA?
Yes, if the importer has the IOR and broker set up to clear customs and pay duties quickly, and if inbound compliance is handled correctly. For many SMB sellers, DDP reduces operational friction.
Is DDU the same as DAP?
In modern practice, it is often used that way. DDU is a legacy market term meaning "duties unpaid." DAP is the current Incoterms term most teams use for similar outcomes.
What data is most important for accurate DDP pricing?
Accurate cargo description, weight, and dimensions, origin, destination, restrictions (batteries, hazmat), and ideally HS code. Errors here create scope exceptions.
What happens if customs holds the cargo?
Holds and exams can occur under any Incoterm. Under DAP, the buyer coordinates directly with their broker. Under DDP, the carrier manages the clearance workflow and AiDeliv facilitates communication. Response speed and documentation readiness determine how quickly the shipment clears.
What is AiDeliv's role in DDP shipments?
AiDeliv operates a technology marketplace that connects shippers with carriers through reverse auctions. The carrier you select performs the actual DDP delivery, including transportation, customs clearance, and duty payment coordination. AiDeliv provides the platform technology and facilitates communication, but does not perform transportation or customs services.
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