What is the difference between DDP and DTP?

1 Overview of DDP Trade Terms
DDP trade term, also known as delivery after tax, is a term used in the Incoterms established by the International Chamber of Commerce (ICC). According to DDP terminology, the seller is responsible for transporting the goods to the designated destination and completing all necessary procedures and expenses for importing the goods before delivery, including customs duties, taxes, and transportation insurance fees. This means that the seller is responsible for the entire transportation and import customs clearance of the goods, ensuring that the goods can be delivered smoothly to the buyer. The DDP term provides great convenience for the buyer, allowing them to receive the goods at the designated location without worrying about the transportation and customs clearance process of the goods.
II Overview of DTP Trade Terms
DTP trade term, also known as delivery at the transportation terminal, is a new type of trade term that has gradually emerged in international trade in recent years. According to DTP terminology, the seller is responsible for transporting the goods to the buyer's designated transportation terminal (such as port, airport, train station, etc.) and delivering the goods to the buyer or its designated carrier at that terminal. Under DTP terms, the seller is responsible for the cost and risk of transporting the goods to the transportation terminal, but is not responsible for import customs clearance procedures and costs. The buyer needs to receive the goods at the transportation terminal, handle import customs clearance procedures and pay relevant taxes and fees on their own.
III The difference between DDP and DTP
Different scope of responsibility: Under DDP terminology, the seller's scope of responsibility is broader, including the entire transportation of goods and import customs clearance work. Under DTP terms, the seller's responsibility is relatively narrow, limited to transporting the goods to the transportation terminal and delivering them to the buyer or its designated carrier.
Cost and risk sharing are different: under DDP terminology, the seller is responsible for all costs and risks associated with transporting the goods to the designated destination, including transportation costs, insurance costs, customs duties, and taxes. Under DTP terms, the seller only needs to bear the cost and risk of transporting the goods to the transportation terminal, while the buyer needs to bear the cost and risk of transporting the goods from the transportation terminal to the final destination, as well as import customs clearance procedures and fees.
Delivery location is different: The delivery location in DDP terms is the destination specified by the buyer and can be any location, including inland areas. The delivery location in DTP terms is the transportation terminal designated by the buyer, such as a port, airport, or train station.
Different degrees of convenience: The DDP term provides great convenience for buyers, eliminating the need to worry about the transportation and customs clearance process of the goods. The DTP term requires the buyer to receive the goods at the transportation terminal and handle import customs clearance procedures on their own, which is relatively cumbersome.
4 Selection and Application of DDP and DTP
When choosing DDP or DTP terms, both buyers and sellers should consider the specific situation comprehensively. Here are some possible influencing factors:
Delivery time and transportation method: If the delivery time is urgent or specific transportation methods (such as air freight) are needed, it may be more inclined to choose the DDP term to ensure that the goods can arrive on time and be delivered smoothly.
Import clearance capability and experience: If the buyer has strong import clearance capability and experience, they may be more willing to choose DTP terminology to better control the import clearance process and reduce related costs.
Risk sharing and cost sharing: Both buyers and sellers should fully consider the issues of risk sharing and cost sharing, and choose the most suitable trade term for themselves. If the seller wishes to reduce risks and costs, they may be more inclined to choose the DDP term; If the buyer wishes to reduce transportation and customs clearance costs, they may be more inclined to choose the DTP term.