What is the difference between CIF and DDU?

1, Overview of CIF delivery method
CIF, also known as cost, insurance and freight, refers to the seller's obligation to bear the cost and freight required to transport the goods to the designated destination port, and to arrange insurance for the goods during transportation. In other words, under CIF terms, the seller is responsible for loading the goods onto the means of transportation, paying the freight to the destination port, and purchasing transportation insurance for the goods. After the goods cross the ship's rail at the loading port, the risk and cost are transferred from the seller to the buyer.
The characteristic of CIF delivery method is that the seller bears most of the risks and costs of the goods during transportation, while the buyer is responsible for receiving the goods at the destination port and handling customs clearance procedures. For the seller, this delivery method can ensure the safe arrival of the goods at the destination port and provide insurance protection for the goods; For the buyer, although they need to bear the customs clearance procedures and costs at the destination port, there is no need to worry about the risks of the goods during transportation.
2, Overview of DDU delivery methods
DDU, also known as Delivered Duty Unpaid, refers to the seller handing over the goods to the buyer for disposal at the designated destination without handling import procedures or unloading the goods from the delivery vehicle, thus completing the delivery. The seller must bear all risks and costs of transporting the goods to the designated destination, but does not include any "taxes" that should be paid when importing in the destination country when customs procedures are required (including the responsibility and risks of handling customs procedures, as well as paying handling fees, tariffs, taxes, and other fees).
Under the DDU delivery method, the seller is responsible for transporting the goods to the designated destination and bears the risks and costs during transportation, but does not bear the handling and payment of import procedures and taxes. This means that the buyer needs to handle the import procedures and pay the relevant taxes and fees on their own after receiving the goods. This delivery method reduces the responsibility of import procedures and taxes for the seller; But for the buyer, it increases operational costs and risks.
3, The main difference between CIF and DDU
Risk and cost sharing are different
Under CIF delivery mode, the seller shall bear the risks and expenses of the goods during transportation, including transportation costs and insurance costs, until the goods cross the ship's rail at the loading port. Under the DDU delivery method, the seller bears the risk and cost of transporting the goods to the designated destination, but does not include the handling and payment of import procedures and taxes. Therefore, under CIF terms, the risk and cost borne by the seller are relatively higher.
Delivery location is different
The CIF delivery location is on board the ship at the loading port, which means that the seller completes the delivery obligation after the goods cross the ship's rail at the loading port. The DDU delivery location is the designated destination, and the seller needs to hand over the goods to the buyer for disposal at the destination to complete the delivery. Therefore, under the DDU delivery method, the seller needs to bear more transportation responsibilities.
Customs clearance procedures and tax processing are different
Under CIF delivery method, the buyer is responsible for handling customs clearance procedures and paying relevant taxes at the destination port. Under the DDU delivery method, although the seller does not bear the handling and payment of import procedures and taxes, the buyer still needs to handle these procedures on their own after receiving the goods. This means that under the DDU term, the buyer needs to bear more operational costs and risks.
In summary, CIF and DDU are two different international trade terms that differ significantly in terms of risk and cost bearing, delivery location, customs clearance procedures, and tax treatment. When selecting an appropriate delivery method, both parties should fully consider factors such as the nature of the goods, transportation conditions, market conditions, and the risk bearing capacity of both parties to ensure the smooth progress of the transaction and the protection of both parties' interests.