Meaning
International commercial terms that require the seller to bear all risks and costs of transport, import clearance, and customs duties until the goods are delivered to the destination protect the buyer. Under a ddp transaction, the seller manages the transport of battery cells from the foreign factory straight to the buyer’s domestic warehouse. This commercial term governs the transfer of ownership at the designated delivery point and ceases once the buyer receives the goods.
Sourcing directors prefer this option because it simplifies the supply chain and shifts logistical risks to the seller.
Shipper Obligation
The seller is responsible for packing, local shipping, export clearance, ocean transport, and paying all import taxes. This includes managing complex customs regulations and securing permits for dangerous goods.
Sourcing Risk
Buyers face minimal risk when using this trade term because the seller owns the cargo during transit. If cells are damaged by water or vibration during sea transit, the seller must replace the shipment at their own cost. This is highly beneficial for purchasers who lack experience in managing global battery logistics.
It prevents the buyer from being stuck with damaged cells or unexpected port fees, ensuring a predictable procurement budget.
Price Efficiency
Sourcing departments must calculate if the price premium charged by the seller for this delivery service is reasonable. While it reduces logistics work for the buyer, the supplier often adds a markup to cover their risk.
