Three letters at the end of a quote decide who takes the 3 a.m. call when cargo stalls at customs. A US customer writes DDP into the contract; the Taiwanese sales team reads it as “we pay one more freight leg” and signs. Three months later the shipment gets value-queried, and the customer shrugs: “You’re DDP — importing is your problem.” That is when they discover they signed an import liability, not a freight term.
Written by SKYCARGO INC, a US logistics company shipping between the US and Taiwan since 2014 and incorporated in the US in 2023, with warehouses in Oregon, Los Angeles and Taoyuan; it serves as an FDA U.S. Agent and can assist clients with USDA registrations and inquiries. More on this topic: Cross-Border Logistics: Ocean, Air & Express Guide Index.
Three terms, one responsibility table
All three come from Incoterms, governing who pays what and where risk passes between seller and buyer:
| DAP (Delivered at Place) | DDP (Delivered Duty Paid) | DDU (legacy term) | |
|---|---|---|---|
| Carriage to destination | Seller | Seller | Seller |
| Export clearance | Seller | Seller | Seller |
| Import clearance | Buyer | Seller | Buyer |
| Duties and import taxes | Buyer | Seller | Buyer |
| Risk transfer | On delivery at place | On delivery at place | On delivery at place |
One line to remember: DAP = I deliver, you pay the tax; DDP = I cover everything, tax-paid to the door. DDU was replaced by DAP in later Incoterms revisions but survives in trade speech and old contracts, meaning roughly DAP — when you hear it, confirm the buyer clears and pays, and move on.
Who pays is the surface; who imports is the point
DDP’s real weight is not the duty check — it is that the seller (or its agent) becomes the Importer of Record: responsible for product description, declared value and classification. US customs holds the importer to statutory reasonable care — “I didn’t know” is no defense, and penalties chase the importer, not your customer. So DDP is not one more payment; it is one more legal liability, and only sellers with a proper IOR arrangement and real document capability should promise it.
The “double-clear, tax-included” gray zone, honestly
The market’s abundant “double-clear, tax-included” packages are DDP in substance, quoted at prices that are frequently too low to be real. Where does the discount come from? Usually two places:
- Undervaluation: declare the goods low and the “tax” gets cheap. A value query later brings back duties plus penalties onto the cargo owner — returning the savings does not cover it
- Borrowed importer names: entry filed under a third party you have never met. When the cargo is held, you cannot retrieve it; when that name blows up, the whole chain gets traced
Buyers are not insulated either: receive goods imported under someone else’s name at understated values, and the beneficiary is reachable when customs unwinds it. The one-question test: ask who the importer of record is and what value is declared — a vendor who cannot answer cleanly is selling you the gray version.
Which term for which situation
- Buyer has a US entity and import experience: DAP — the buyer controls clearance and tax, cleanest split of duties
- Seller wants to deliver a tax-inclusive experience (e-commerce, small retail customers): DDP, done properly — you or your agent as IOR, honest declaration, tax as a transparent cost line
- Someone pushes an abnormally cheap “tax-included” price at you: ask the two questions first, then decide whether to board
- Volume worth negotiating: settle the term together with the transport mode — the ocean-side trade-offs live in LCL vs FCL
How SKYCARGO quotes: DAP, with you as the importer
For client cargo, SKYCARGO INC normally quotes DAP: we deliver to the door, and the duty is paid by the Importer of Record, normally you, as a non-resident importer, with entries filed through our partner licensed customs broker and declared honestly — duty is duty, freight is freight. We act as Importer of Record for a client’s goods in one situation only: when we are your selling agent in the US — under a long-term agency agreement, actually finding buyers and taking orders for you in the US, paid a commission on sales, with warehousing, delivery and customer service continuing after import, and, for food, running the FSVP ourselves. We take these cases only when all of those conditions are met. We do not act as a nominal consignee, collect and forward payments only, or sign a power of attorney only. That is a different thing entirely from the gray “double-clear tax-included” packages whose importer of record nobody can name and whose declared values are abnormally low. Whether your deal should sign DAP or DDP, tell us the terms and the cargo and we will assess it alongside B2B import compliance.
Incoterms allocations follow the contract and each customs administration’s practice. Reference only; consult compliance counsel for specific cases.
