DDP (Delivery Duty Paid) is one of the Incoterms used in the international shipping business. This rule entitles the exporter to deliver the cargo at his importer’s disposal and pay for all the customs duties and import clearance charges. If you are in the exporting business, you would feel the pressure that this Incoterm brings with it, isn’t it? Yes, it is not something any seller likes to observe in his shipping contract. The concern is not just the expenses that you need to bear but also the risks and obligations with it. You have to go through the pressure of handling import clearance in a foreign country!
Although exporters never want to comply with DDP as a part of their shipping contract, it becomes necessary in some exceptional cases. Like, if you are trying to expand your business or if it is an influential client with the potential to offer bigger deals, you might have to surrender to his demands. So, if you do agree to DDP, how will you manage everything? And how can you reduce the charges so that it does not incur a loss? These are the questions we will address here and also learn some effective tips on reducing your DDP charges.
Every trader has to think of the costs involved in the shipment to chalk out the possible profits he can make from the deals.
Tips & Suggestions To Reduce DDP Charges
If you are a budding trader, turning down any shipping contract will affect your business. So, the best you should do is learn ways in which you can reduce the costs and risks involved in DDP shipping contracts. Clearing the customs formalities in an importer’s country is a crucial consideration. Any delays or mismanagement of documentation can create chaos in shipping!
● Check Out All The Import Regulations
Import regulations and duties of one country are likely to differ from that of the other. You should not jump to commitments without acquiring detailed information about the same. And do not rely upon the information offered by your business associates unless you are sure of the source. Once you have the details, discuss the same with your importer to keep the terms clear.
● Hire The Best Shipping Company In Business
The best and most dependable way of avoiding chaos in overseas shipping with Delivery Duty Paid terms is taking assistance from the best shipping company. The leading firms in this arena have all the updates, information and knowledge of how to handle import customs. They can pull all the right strings and manage your business operations efficiently. Analyse the market options and choose the one that suits your purpose.
● Make Contacts With Import Agents
The wise and successful traders know the power and influence of networking in the shipping business. You will always have an edge in shipping deals if you know overseas agents and transporters. Keep looking for leads and expand your network to be able to have some trustworthy ground support on foreign lands!
● Keep A Check On The Special Considerations
Every country, especially the leading world traders, lays a strong set of regulations and duties for every good that enters their geographical boundaries. For instance, exporters in the U.S.A have to pay VAT and demurrage charges. Also, bribery is not the solution in that region for transporting the cargo within the predefined deadline. So, you should be careful with these special cases to avoid the last-minute disaster.
● Verify Importer’s License & Trading Documents
It will cost you a fortune if the cargo arrives at the delivery port and the importer’s documents are not verified and valid. Take some pre-handed copies of his trading license and other documents needed for customs clearance. You cannot compromise with this part of the business deals that concern DDP.
● Take Care of The Customs
Every major and minor document, bill, and a receipt is crucial for getting the import customs clearance. Whether it be the Bill of Entry or IGM (Import General Manifest), you should verify every document twice to avoid any hassle. Most of the exporters end up paying a lot of money in these cases.
● Verify The Markup Calculated By The Importer
Importers present a markup value of expenses you will need to bear in a DDP contract. You should verify this value by estimating with the help of a shipping advisor. You will be able to make this verification yourself after a few successful shipments.
Avoiding DDP freight shipments is not the solution at all if you wish to maintain business relations . The best option is to channelise all these shipping operations through the secure network of a reliable shipping company. You can monitor the operations while their agents will carry on the tasks for you. With this service in action, it becomes easier to avoid unexpected transportation charges. The best way to reduce expenses in this type of shipments is using the expertise of well-integrated shipping service providers.
