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Delivered Duty Paid is known in the trade industry as DDP, and it is a term used to describe the seller insuring the goods that are supposed to be delivered to a specific location in one country. Although DDP is clearly defined, the rm does have certain misconceptions attached to its use which may cause confusion and result in businesses losing money. International country based logistics companies like TONGZHI aim to help these SMEs with better understanding on this certain type of logistics.
Myth # 1 DDP shipping is included in any shipment under it.
A common belief while engaging in DDP shipping is that one cannot incur any extra expenditures once the goods are allocated as DDP goods. This is definitely not true as it can sometimes be utterly false. The using a DDP option covers other things like transportation of the goods, insurance of the goods and import duties but additional factors like local taxes or others which are unforeseen and are outside the original agreement can still pop up.
Myth # 2 DDP removes the need of the import documentation.
This is a common misunderstanding for firms looking to use the DDP option, not taking into account how it works with import documentation. DDP shipping does not remove the need for the import documents, and quite the opposite is true. On the part of sellers, they have to submit some documents like commercial invoices, all packing lists and specific licenses like permits to allow for authorization clearance.
Myth #3: The Onus of Delivery is on DDP
If you remember your statistics, the average time to process a DDP order is more than other types. Additional issues also exist concerning functional areas, like delays from customs checks or arrangements that were affected by weather. Realistic estimates should be offered by the seller and alternative options should be available too.
Myth #4: Low Cost Remains a Constant
Everybody knows the basic rule of business: the lower the shipping costs, the higher the profit margin. Apparently, this is one of the fallacies that DDP brings forward: how many businesses assume that this rule applies upwards too? The reality, alas, proves otherwise. There are certain circumstances when the lumpsum goes even higher than other methods.
Conclusion
DDP shipping can be best characterized as moving at the speed of its potential and bypassing all areas of responsibility but not without some complexities of its own. TONGZHI advises businesses to fully understand all that the term DDP shipping entails and other uncertainties that you may incur. In this terms, businesses can be prepared adequately and fluxo represented in international trading is improved.
