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DDP risks and how to deal with them

wallpapers News 2022-03-02
What are the risks of DDP?
First of all, compared with FOB/CIF, DDP is much riskier for the seller, which is the riskiest trade term. Under FOB or CIF, the risk passes to the buyer when the goods are loaded onboard the ship. But under DDP, the seller's risk continues until it is delivered to the customer. Anything wrong with the goods should be paid by the seller. Therefore, the seller of DDP had better be able to deal with cargo transportation insurance. If there is a problem, the seller can also look for an insurance company.
Secondly, compared with FOB/CIF, the SELLER of DDP must know the policies of the customs or other government departments of the importing country on this kind of goods, whether there are any restrictions, what certification is required and what the import tariff is. If you do not understand clearly in advance, it will be quite troublesome to solve the problem when the goods arrive at the destination port. For example, when the food arrives in the United States, you must understand the provisions of the FDA(Food and Drug Administration of the United States) in addition to the customs duties of the United States.
In addition, there are many links involved in DDP. Some links may not be taken into account in the initial cost accounting, such as the inspection fee generated by the customs inspection of the goods at the destination port, or even the overdue storage fee, as well as additional costs incurred in some other links. Therefore, when calculating the cost and giving the quotation to the customer, it is best to leave more space to COVER the unexpected cost.
What are the risks of DDP?
First, as mentioned earlier, take out a warehouse to warehouse insurance against accidents in transit.
Second, find an experienced and powerful forwarder, because DDP involves a lot of costs. If there are mistakes or omissions reported by inexperienced forwarders, losses will be caused. Shipper to forwarder inquiry, to clear the goods, especially the name, must be detailed and it is in both English and Chinese (type of material, what use, even) customs codes of the goods before six can commonly, because after four basic countries H.S.C ODE, detailed address and zip code, destination or FOB value, etc.

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